Mumbai: Jewellery firms are finding it increasingly hard to get credit to import raw material and ship out their wares as banks tighten the screws, worried about defaults and sharp practices in the sector, reports Business Today.

The problem has become so acute that jewellery industry executives are sitting down for talks next Tuesday with finance ministry officials, said Bachhraj Bamalwa, director of the All-India Gem and Jewellery Trade Federation (GJF).

“Banks have classified gems and jewellery into the high-risk category,” he said, adding the industry was already paying higher interest rates than other sectors.

Tight credit in the capital-intensive industry could hurt shipments from India, one of the world’s top jewellery exporters, possibly pushing up the trade deficit and undermining the rupee.

Gems and jewellery account for about 15 per cent of India’s exports. Among the biggest jewellery exporters are Gitanjali Gems, Rajesh Exports and Asian Star.