Nirav Modi and Choksi fled the country in early 2018 after it emerged that the diamond traders had cheated Punjab National Bank in what is allegedly a Rs 14,000 crore fraud. But the impact showed during the last financial year as their Indian businesses came to a standstill.
As a result, during the last financial year, silver exports plummeted to $838 million from nearly $3.4 billion in 2017-18, data available with the Gems & Jewellery Export Promotion Council (GJEPC) showed. Senior functionaries of the trade body confirmed that the decline was due to the exit of the uncle-nephew duo after the alleged fraud was unearthed.
The maximum impact on exports was on the Surat Special Economic Zone, government officials told TOI, although data was not available immediately.
There are also allegations that the exports undertaken by fugitives Modi and Choksi was largely on paper as there has not been a shift in business to other players in the Indian market.
The over $2.5 billion fall in silver exports is one of the key factors behind the over 3% decline in gems and jewellery exports although GJEPC vice-president Colin Shah put the blame on delay in GST refunds and liquidity problems for the industry’s woes. Traditionally, the sector has been a key contributor to India’s exports. Last year, export of gold medallions and coins witnessed a 55% crash, from close to $2 billion in 2017-18 to $876 million.
This is being attributed to the Director General of Foreign Trade’s decision to ban the export of 24-carat gold coins and medallions on repeated complaints of misuse by exporters, who were allegedly indulging in circular trading of this item. Following the change in rule, exports have virtually come to a standstill as there is no demand for coins and medallions of 22 or 18 carat, Shah said.