An Indian jeweller evaluating a piece of jewellery in Mumbai
© AFP/File Sebastian D'Souza

MUMBAI (AFP) - "The current economic situation has pushed the industry into a corner," said Vasant Mehta, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), an umbrella group of more than 5,000 exporters and manufacturers.

"We seek interim relief from the government to prevent the imminent crisis," he told a news conference late Tuesday.

Gems and jewellery constitute up to 35 percent of India's exports, with the United States its largest market.

The industry has already cut back manufacturing by more than 25 percent and recently announced a moratorium on the purchase of rough diamonds for processing and production, the GJEPC said.

Exports in the sector fell just over 34 percent to 987 million dollars in November, down from 1.5 billion dollars in the same period of 2007, according to provisional GJEPC figures.

"December is likely to show a similar (downward) trend," Mehta told AFP.

At the manufacturing level, cut and polished diamond exports have fallen more than 20 percent, against the same period last year.

The council said it was seeking foreign exchange and credit-linked measures to reduce pressures on its exporters.

It has also looking for longer credit periods from the central Reserve Bank of India to boost finance and help secure fresh orders by diversifying into different markets.

India's overall export growth has been hit by the global financial crisis, with key sectors such as textiles, jewellery and handicrafts the hardest hit.

Industry officials say foreign trade could even halve by the end of the financial year in March.

©AFP