As there was zero buying from mid March up until end of May (almost), the jewellery industry in India has been going through a surfeit of challenges. The ripple effect of lockdown has led many manufacturers to worry about cash flow and getting their most-skilled workers back from their villages. The jewellery industry as we all know is highly skill oriented and every artisan is well trained for several years. There is high possibility that artisans may not return from their villages for a good 4 months. How will manufacturers meet demand if that happens? Retailers on the other hand are also finding it difficult to make payments as they are not making any sale, which in turn is putting manufacturers in a tough spot.
Will workers come back from their villages?
Anand Shah, Anand Shah Jewels
The biggest challenge is related to workers who have gone back to their villages. The challenge is to get karigars back, when the lockdown is lifted. The good karigars, who have specific skill set have to return in time to complete orders. The really talented ones are quite irreplaceable. We may have best of the designers, but ultimately we need the karigars to implement the design. Many of them are from Kolkata, their families too will not want them to come back for the next three months. They have just reached their villages and many are still on their way.
Regarding payments, they will eventually come, as all jewellers are financially stable. Retailers have not lost the money. It may take a little longer for them to pay what they owe us. So, I don’t think liquidity is matter of much concern in the long run.
Payments from retailers have to be recovered
Deepak Jain, Vijay Gems and Jewellery
The biggest worry is that business is at a standstill. Payments from retailers need to be recovered. A lot of money is pending. Business has not happened and even for orders delivered in December last year and January this year, payments would have been recovered in March, but because the lockdown was announced and retailers had no business thereafter all the money is stuck up. It is a huge loss for the business. We too have to pay our suppliers and staff salaries, and because of no incoming cash it is difficult to run the business. Everybody needs to arrange their finances through banks, and ensure that money comes into the system and the wheels start moving again. The business all over needs a push start.
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April - May 2020