RBI allows jewellery trade 180 days to repatriate export proceeds

The Reserve Bank of India (RBI) has relaxed the norm for suppliers' and buyers' credit for importing rough, cut and polished diamonds for 180 days, from the existing 90 days, from the date of shipment.

This has been done in view of the difficulty faced by jewellery exporters in receiving remittances for exports within 90 days from the date of shipment. The Gems and Jewellery Export Promotion Council (GJEPC) had made representation to the government to extend the period.

''It has been decided, in consultation with the government of India, that the 'clean credit', ie, credit given by a foreign supplier to its Indian customer / buyer, without any letter of credit (suppliers' credit) / letter of undertaking (buyers' credit) / fixed deposits from any Indian financial institution for import of rough, cut and polished diamonds, may be permitted for a period not exceeding 180 days from the date of shipment,'' RBI said in a notification released on Monday.

The revised directions will come into force with immediate effect, RBI said.

"The extension will boost exporters' sentiment. It was impossible for exporters to get credit on exported goods due to their inability to receive remittances within 90 days. The industry's structure is such where any credit period less than 180 days will hit exporters hard. After achieving the figure of $44 billion a few years ago, gems and jewellery export declined to $41 billion in 2013-14, which is now expected to reach $44 billion again, this year," Vipul Shah, chairman of GJEPC, said.