India’s diamond manufacturers have asked the Indian government for credit assistance to the tune of $4 billion in order to help them cope with a sharp drop in demand for luxury goods due to the global recession, Polished Prices reported.



Vasant Mehta, chairman of the Gem & Jewelery Export Promotion Council, told reporters in Mumbai last week that the manufacturers are asking the Indian government to allow certain banks lend dollars from the country's foreign currency reserves to the Indian diamond industry.



India's diamond polishing industry has suffered greatly because of the global economic downturn, including the laying-off of 400,000 people employed in the diamond industry.



Mheta said during the press conference that diamond industry is “slowly coming back to normal and it will need easy finance and lower tax to restore operations.” Mheta added that about 10% of the workers have been re-hired the past few weeks because of an upswing in demand.



According to the Gem & Jewelry Export Promotion Council, India’s exports, which account for a fifth of the nation’s total, fell 26% to $2.93 billion in the April- May period from a year ago.