Coronavirus Forces India to Seek Extra Credit on Sales to China
February 16, 20
(IDEX Online) - Jewelry exporters in India are seeking to extend lines of credit as the coronavirus hits one of their biggest markets, according to reports on the Business Standard website.
An estimated $2 billion of payment receivables are currently stuck with jewelry importers in China, which is effectively in lockdown. The country accounts for almost 30 percent of India's total jewelry trade.
India's Gems and Jewellery Export Promotion Council (GJEPC) has sought to extend credit from six months to a year as retailers in China remain closed indefinitely, fearing the virus will spread.
"We have written to leading banks and the ministries concerned to grant another six months for receivables," said Colin Shah, vice chairman of GJEPC.
The Chinese New Year, traditionally a peak buying, had been "a whitewash," he said, as people remained indoors and factories and shops stayed closed.
The State Bank of India is estimated to have extended a cumulative Rs 6,000 crore ($8.4 billion in credit and Indian Bank Rs 7,000 crore ($9.8 billion).
"Since the outbreak, not only gems and jewelry sale[s] but the entire trade has come to a grinding halt," said Sabyasachi Ray, executive director at GJEPC.
He said the Reserve Bank of India has granted them a six-month timeline but a further six months would help significantly.