Banks are slowly loosening their purse to offer greater credit to the gems and jewellery exports sector and in the nine-month period ended March 2021, credit grew by 15 per cent, a senior official said on Monday.
Banks have increased the credit to the industry to Rs 62,700 crore in March 2021 from Rs 54,600 crore in July last year.
The sector had seen a squeeze in credit in the past due to PNB fraud apprehension and Covid-19 disruptions of the recent months.
"Increase of credit to the industry from banks is the result of pragmatic decisions taken by the industry during the pandemic. India's leading diamond-trade organisations called on members to stop importing rough diamonds during Q1 of FY 2021 to prevent oversupply and optimising debt leverage," Gem Jewellery Export Promotion Council (GJEPC) chairman Colin Shah said.
However, exports have rebounded and the trend remains robust.
"With a meagre export turnover of USD 2.51 billion in the month of September '20, the sector managed to achieve a turnover that grew by about 36 per cent to USD 3.42 billion in March 2021, higher than the average monthly export turnover in the last 3 years," Shah said.
The trade began in the calendar year 2021 with 10 per cent lower inventory, healthier financials and a consolidated market structure.