Rupee erosion, no gain for gems and jewellery exporters
Updated: Sep 02, 2013 05:13:06pm
New Delhi, Sept 2 (KNN) A sharp depreciation in rupee has not resulted in gain for exporters of gems and jewellery, as erosion in rupee value has resulted in increase in the landed cost of raw material.
India depends largely on imported rough diamonds and gold for making diamond and gold jewellery for the export market, while about 20 per cent depreciation in rupee value since May would have helped higher export realizations, the landed cost of raw material too has gone up.
A high rate of domestic inflation which is being fuelled by rupee depreciation, has added to the rise in labour cost.
According to President of the Surat Diamond Association, Dinesh Navadiya, “What we export is the combined cost of raw material and the labour. Generally, small businessmen are facing problem due to rupee depreciation. Small businessmen, who have already made the consignments ready, they have a 120 days credit, with the rupee fall, they have to pay more. For the importers, in case they have their payment due, they have to pay more.”
A devalued rupee has not brought much cheer to the gem and jewellery exporters in the country. Though the global demand has not gone down much, the rupee depreciation has some indirect impacts on the exporters.
Proprietor of House of Gems, Santosh Grover said, “The indirect impact of rupee depreciation is not good for us. We are not getting many benefits due to increase in cost of production. Our raw material cost has gone up, the labour costs have also gone up now with the hike in gold rate.
“The cost of diamond is influenced by the gold rate. So, it looks as though the exporters are benefitting but indirectly they are not. But the good part is that, the demand is same from overseas clients for us,” Grover added. (KNN/SD)
India depends largely on imported rough diamonds and gold for making diamond and gold jewellery for the export market, while about 20 per cent depreciation in rupee value since May would have helped higher export realizations, the landed cost of raw material too has gone up.
A high rate of domestic inflation which is being fuelled by rupee depreciation, has added to the rise in labour cost.
According to President of the Surat Diamond Association, Dinesh Navadiya, “What we export is the combined cost of raw material and the labour. Generally, small businessmen are facing problem due to rupee depreciation. Small businessmen, who have already made the consignments ready, they have a 120 days credit, with the rupee fall, they have to pay more. For the importers, in case they have their payment due, they have to pay more.”
A devalued rupee has not brought much cheer to the gem and jewellery exporters in the country. Though the global demand has not gone down much, the rupee depreciation has some indirect impacts on the exporters.
Proprietor of House of Gems, Santosh Grover said, “The indirect impact of rupee depreciation is not good for us. We are not getting many benefits due to increase in cost of production. Our raw material cost has gone up, the labour costs have also gone up now with the hike in gold rate.
“The cost of diamond is influenced by the gold rate. So, it looks as though the exporters are benefitting but indirectly they are not. But the good part is that, the demand is same from overseas clients for us,” Grover added. (KNN/SD)
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