Exporters of Gems and Jewellery to Benefit from Rupee Depreciation

• Updated On Mar 25, 2020

Exporters of gems and jewellery are likely to benefit from rupee depreciation against the dollar. The exported goods value will increase these exporters cash book with an equal amount of receivables. On Monday the rupee value closed approximately at 66.65 owing to sell-off within the global equity markets. The value of rupee has depreciated to 3.60% since August 11 when China decreased the rate of the yuan. So far in 2015, the rupee has fallen by 5.52%.

Vipul Shah, the chairman of GJEPC (Gems & Jewellery Export Promotion Council) stated that while the fall is profitable for Indian exporters which includes jewellery and gems exporters, a feeble sentiment will limit the full benefit.

The data collected by the GJEPC highlighted net jewellery and gems exports in the year 2014-15 were $36.2 billion, up 4% from last year. Meanwhile, the exports had depreciated from $39.14 billion last year to $34.99 billion in the year 2013-14.

Shah further stated that with volatility in international equity as well as currency markets, there is a probability that consumers are likely to shy away to buy luxuries. This is definitely not a good indication for India’s exporters. Besides, a falling rupee certainly will make commodities that are dollar-denominated much costlier.

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