There are allegations that most of the exports undertaken by the fugitive diamantaires were mainly on papers as there has not been a shift in business to other players in India.
New Delhi: The impact of Nirav Modi and Mehul Choksi’s exit from India was felt in the country’s silver jewellery exports last year. The Times of India citing data from the Gems & Jewellery Export Promotion Council (GJEPC) said in FY19 silver jewellery exports plummeted 75% to $838 million as against $3.4 billion in 2017-18 financial year. Senior functionaries of the trade body told the publication that the decline was due to the exit of the uncle-nephew duo after the alleged fraud was unearthed.
Both Nirav Modi and his uncle Mehul Chiksi fled India in early 2018 after financial frauds to the tune of Rs 14,000 crore was unearthed in state-owned lender Punjab National Bank, allegedly done by the two diamond traders.
Exports of gold medallions and coins also fell 55.6% in FY19 to $876 million as compared to $1.97 billion in FY18.
The ToI report citing government officials said the maximum impact of the export fall was felt in the Surat Special Economic Zone although any data was not available. But there are allegations that most of the exports undertaken by the fugitive diamantaires were mainly on papers as there has not been a shift in business to other players in India.
This is also evident from the fact that export of cut and polished diamonds has remained almost flat in FY19 as compared to FY18 while, exports of gold jewellery increased by over 24% in FY19 despite the absence of big jewellers like Choksi and Nirav Modi.
Traditionally the gems and jewellery sector has been a major contributor to India’s exports. The $2.5 billion fall in silver exports is one of the key reasons behind over 3% decline in gems and jewellery exports, although GJEPC vice-president Colin Shah put the blame on delay in GST refund and liquidity problems.
Meanwhile, the fall in gold medallions and coin export is attributed to DGFT’s decision to ban the export of 24-carat gold coin and medallions on repeated complaints of misuse by exporters.