Silver exports fall 75% after Nirav Modi, Mehul Choksi flee India

India's silver jewellery exports nosedived 75% to $838 million in the financial year (FY) 2018-19 from nearly $3.4 billion in FY 2017-18. The sharp fall is seen on account of Nirav Modi and Mehul Choksi's exit from the Indian market. The uncle-nephew duo fled the country in early 2018 after allegedly cheating the Punjab National Bank (PNB) to the tune of Rs 14,000 crore.

The jolt of the impact, however, manifested during the FY 2018-19 as Modi and Choksi's businesses came to a halt. This resulted in an over $2.5 billion slump in silver exports, the Times of India (TOI) reported citing data from the Gems & Jewellery Export Promotion Council (GJEPC).

Senior officials from the trade body verified to the TOI that the dwindling export numbers were due to the fugitive duo's exit from the country.

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The exports from the Surat Special Economic Zone have taken the maximum hit, government officials told the news daily, albeit the data was not available immediately.

The free fall in silver exports is being attributed as one of the main factors behind over 3% drop in gems and jewellery exports. However, GJEPC Vice-President Colin Shah holds the GST refunds and liquidity crunch responsible for the industry's woes. The sector traditionally has been a primary contributor to India's exports.

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The gold medallions and coins exports saw a 55% crash to $876 million in FY 2018-19 from around $2 billion in 2017-18.

This fall has also been attributed to the Directorate General of Foreign Trade's (DGFT) decision to ban the export of 24-carat gold coins and medallions following frequent complaints that the exporters were allegedly indulging in the circular trade of this item. Shah credited the fall in exports to this rule change as there is no demand for coins and medallions of 22 or 18 carat.

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