The Indian gems and jewellery industry has already laid-off 65,000 workers and might be forced to lay-off a like number in the next two months, an industry official said. This could take the job loss in this sector upto 1.2 lakhs.

"The Indian gems and jewellery sector was forced to lay-off 65,000 workers between August-October. Due to the ongoing economic slowdown and slump in demand, there could be a further lay-off of 65,000 workers in the next two months," Gems and Jewellery Export Promotion Council's (GJEPC) chairman, Vasant Mehta, told reporters here.

The sector has also been afflicted by a significant dip of 34.25 per cent in exports in November, Mehta said.

The labour in this sector are mainly casual migrants from states like West Bengal, Orrisa and Bihar. Since this industry is classified as a handicraft industry and not a small sector one, labour laws are not applicable to the sector.

Rough diamonds imports grow
Rough diamonds imports in November were up 13 per cent to $599.61 million. The volume of imports, however, more clearly reflected the collective industry decision to freeze all rough imports, which took effect in the last week of November.

Given the slowdown in trade, in November  the GJEPC had called for a one-month halt tp all rough imports, reasoning that the move would allow diamantaires an opportunity to deplete existing stock and reduce industry debt.

By volume, therefore, imports fell 15 per cent to 8.148 million carats. The growth in total import value for the month was due to a 33 per cent rise in the average price of India's rough imports compared with November 2007. 

Rough exports increased 3 per cent to $42.75 million, though export volumes fell 34 per cent for the month.

India's net rough imports -- imports minus exports -- grew 13 per cent to $556.86 million. The country's net diamond account, representing the extent to which total net polished goods exceeded net rough imported goods, sank to negative $496.08 million, compared with positive $74.55 million last year.

Concessions requested from government
The Gem & Jewellery Export Promotion Council has requested raising the rupee interest rate subvention from 2 per cent to 4 per cent, extending the same facility to dollar credit where interest rate is fixed at 400-500 basis points above the London Inter-bank Offered Rate (Libor), RBI to make available adequate dollar lines and banks should be asked to continue giving credit limits sanctioned to each individual exporter on absolute dollar terms rather than on fluctuating exchange rate

The current practise of declaring an exporter's account as NPA (non-performing asset) due to delayed collections and thereby bringing the rating down should be discontinued. Finally, it also wanted the grant of duty credit scrip equivalent to 2.5 per cent of FOB value of previous year exports to all countries.