The gems and jewellery sector has already seen a credit squeeze after banks imposed extra cautionary measures in the aftermath of the USD 2-billion PNB fraud case. “We will be happy if the current total credit limit for the sector is retained at about Rs 60,000 crore for 2019-20 given the circumstances,” GJEPC executive director Sabyasachi Ray said.

“GJEPC is urging to offer the credit in dollar terms as at least 80 per cent of our credit is used to import diamond and gold meant for exports,” he said. Ray said the industry was also facing credit crunch with the banking system not disbursing the ‘standby credit’, despite the sector losing 10-15 per cent of its limit due to depreciation of the rupee. In the last six months, the Indian currency has depreciated by 15 per cent, he said.

“The sector wants that collateral demand from banks should be restricted at about 30 per cent and not beyond,” Ray said, adding, the council has a scheduled meeting with finance ministry officials next week. The gems and jewellery sector has witnessed a dip in exports, with April-October shipments contracting by 4.35 per cent in dollar terms, he said.

Ray, however, expects that the Christmas season will improve trade, led by the United States. The US is the largest market for diamonds from India, GJEPC chairman P K Agarwal said. It accounted for 19-20 per cent of total industry exports of around USD 33 billion in 2017-18.