Gems and Jewellery industry urges policy reforms to make it more competitive and boost exports
The Covid-19 pandemic has taken a heavy toll on the global economy, pushing almost the whole world into a recession and adversely impacting global trade. Hopes and dreams were shattered as millions lost jobs and companies collapsed. The gems and jewellery industry was not any different.
India is known for its Gems and jewellery and is respected across the world for its skill and craftsmanship.
Today, the Indian gems and jewellery exports has been one of the largest in the world in terms of revenue in the range of USD 37-40 Bn in the last 2-3 years. At present, in the overall gems and jewellery exports across the world, India ranks 5th position. This leadership position has been achieved by the relentless efforts by the industry with 4.3 million workforce, which particularly includes Indian craftsmanship and the skill sets for diamond cutting and polishing of the rough diamond which comes to India for processing.
Various parts of the country have various expertise in jewellery exports, eg; Mumbai is the trading hub, Surat is for cutting and polishing of diamonds, whereas Jaipur is the hub for coloured gem stones. Likewise, southern parts of the country contributes to jewellery made from precious metals like Gold and Silver.
The rough diamond comes to India for processing and in return India makes Billions of revenue from the exports of processed diamonds. It is estimated that the gems and jewellery exports contributes to over 7 percent of GDP and over 12 percent in merchandise exports.
India contributes 5.8 per cent of the global gems and jewellery exports demand of US$629.06 billion.
Our Hon’ble Prime Minister Shri Narendra Modi has envisioned to make India as the global hub of jewellery manufacturing and exports by the year 2022. Also, Shri Uddhav Thackeray, Chief Minister of Maharashtra recently in his address mentioned to make Mumbai and Maharashtra as the global hub for diamond and jewellery trading. It is time for the government to take some policy leap which will achieve these dreams to come true.
Indian Gems and Jewellery industry has represented policy recommendations to the Hon’ble finance minister Smt. Nirmala Sitharaman for the upcoming Union Budget 2021-222. The industry has recommended measures like reduction of import duty on cut and polished diamonds and precious and semi-precious gemstones from 7.5% to 2.5%; Gold import duty from 12.5% to 4%; Technology Upgradation Fund (TUF) Scheme for G&J industry; additional Common Facility Centres (CFCs) to boost the gems and jewellery exports.
Over the last few years, the import duty of cut and polished diamonds which has increased from 2.5% to 7.5%, is impacting our dream of making India the manufacturing and trading centre, or being a serious alternative to Antwerp, Hong Kong as lot of shift is happening specially in the last couple of years, leading to loss of business and jobs, and alternate manufacturing centres are being developed. We have urged the Govt. to reduce the import duty from 7.5% to 2.5%.
Reduction in import duty on Precious metals Gold/Silver/Platinum from 12.5% to 4% will boost exports and help us to be globally competitive. Even large diaspora/NRI, go to Dubai or Hong Kong to buy jewellery which is affecting jobs in India as well as the business in India.
While India is known as a diamond-manufacturing centre, it is also the world’s premier producer of cut and polished emeralds, tanzanites and morganites. And more than 90 per cent of the world’s emeralds are processed in Jaipur. In fact, Jaipur is now facing stiff competition and is losing out business to Thailand. This is mainly due to high duty on cut and polished precious and semi-precious gemstones and also because of the 0.5% duty on rough colour gemstones. Another impediment is the delay in clearing parcels. We want the government to take note of the situation and save Jaipur gem industry from fading away.
As the world is going digital and travel restrictions are expected to continue for the next two quarters of 2021, our manufacturers need miners to sell roughs directly. We have also requested a clarification on Online Equalization Levy of 2% for B2B International Diamond Auction on consideration received by the e-commerce operators from e-commerce supply of goods made or facilitate by it to an Indian resident.
E-commerce is the future. We request a dedicated fast track desk at all designated Custom Ports for the Gems and jewellery having value below US$800 to avail of the de Minimis benefit of import duty for imports at USA.
We are also looking for clarification requesting taxation provision to allow sale of rough diamonds in Special Notified Zone in Mumbai.
Let me point to the fact that the gems and jewellery exports industry is a perfect example of Atmanirbhar Bharat and Vocal for Local, which are the government’s policy to make India a self-reliant country and to make the Indian economy one of the largest in the world.
With the mounting challenges due to pandemic, we expect the government in the budget announce measures that would help put glitter back in the gems and jewellery industry.