No industry can flourish unless it is well supported by Government policies, which can act as the wind beneath its wings. The recent Budget announcement exceeded the industry’s expectations and bolstered our spirits. This coupled with the gem and jewellery industry’s entrepreneurial spirit and agility to adapt to even difficult circumstances is what sets our sector apart.
Today, India’s gem and jewellery industry is a world leader that directly or indirectly provides employment to around 5 million people. We are fortunate to have inherited a rich 5,000-year-old legacy in jewellery and gemstones. India was the diamond capital of the world for over two thousand years before the action shifted to other diamond-producing countries.
Despite not having any significant gold or diamond resources, India has stayed in the spotlight for its cutting and polishing skills in diamonds and gemstones -- we are the world leaders in diamond manufacturing and also rank number one globally for cutting emerald, tanzanite and morganite. It is a sector that wholeheartedly embodies the present-day sentiment: to be Atmanirbhar or self-reliant.
Today India exports gems and jewellery worth around $37 billion each year, and ranks 5th in terms of the largest exporting nations. The equally thriving domestic industry owes its success to the highly skilled artisans, world-class designers and manufacturers, who are adept at bringing together handcrafted and modern techniques to create contemporary collections that are relevant in modern times.
Our Hon’ble Prime Minister Shri Narendra Modi has envisioned making India as the global hub of jewellery manufacturing and exports in the near future. Our aim is to become a $70 billion export industry in a couple of years.
Dreams, unless acted upon, cannot become a reality. And to realise them, the Gem & Jewellery Export Promotion Council (GJEPC), as a key facilitator between the industry and the Government, has been taking several initiatives to transform India into the world’s primary sourcing centre for gems and jewellery.
The Council has been in a constant dialogue with the Hon’ble Finance Minister, Smt. Nirmala Sitharaman to resolve the issues that will bring us closer to achieving our goals.
We are happy that the 5% duty cut on gold is the first Union Budget allocation for the Indian gem and jewellery industry in the last 2-3 years. There is still a 2.5% cess applicable to manufacturers operating in the domestic tariff area. Overall, this is a positive signal for legitimate, organised players that their appeals are being heard by the Government. It will also reduce the difference between the organised and unorganised sections of the industry. The duty reduction to 10% on findings, too, will benefit exporters as well as domestic jewellery manufacturers. Choosing SEBI as the regulator for the gold exchange will add more transparency to the industry. All in all, this Budget is a step in the right direction.
In addition to this, the Finance Ministry recently issued a notification on the revamped Gold Monetisation Scheme (GMS), accepting most of the recommendations of the GJEPC. The modified GMS will help reduce our dependence on gold imports as the consumer-friendly provisions may help to unlock some of the estimated 25,000 tonnes of gold in private hands.
Policies that Will Further Boost the Sector
Over the last few years, the import duty of cut and polished diamonds and coloured gemstones, 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 or Hong Kong. We have urged the Government to revert it to 2.5%.
In fact, Jaipur has been 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 request the Government to take note of the situation and save the Jaipur gem industry from fading away.
The role of e-commerce in our business has only accelerated since the pandemic. We have urged the Commerce Ministry for a dedicated fast- track desk at all designated Custom Ports for gems and jewellery valued below US$800 to avail of the de Minimis benefit of import duty for exports to the USA.
We are also seeking a Technology Upgradation Fund (TUF) Scheme; additional Common Facility Centres (CFCs) for MSMEs; and a clarification on taxation provision to allow sale of rough diamonds in the Special Notified Zone in Mumbai.
To boost the trade and tap new markets, the Council has been organising two physical trade shows -- IIJS Premiere and IIJS Signature -- every year. We also hold Buyer-Seller meets, which are more product- and market-focussed.
When Covid-19 gripped the globe, we were all unprepared. Life came to an abrupt halt and all the activities were suspended in order to safeguard our lives. The Indian gems and jewellery industry, too, was severely impacted. The industry’s never-say-die attitude has always pulled it through the rough and tumble of economic cycles and for that matter, natural or health calamities like the one we are experiencing now.
Adapting to difficult situations has thankfully come easy to us. We took a few important measures last April by voluntarily suspending imports of rough diamonds to preserve inventory values and clear existing stocks.
Later the Council rode the digital wave and successfully held Virtual IIJS shows, Buyer-Seller Meets, the first ever Virtual India Gem & Jewellery Show (e-IGJS), as well as India Global Connect meetings with hitherto untapped markets, and knowledge-sharing webinars.
The Virtual trade shows, the first of its kind in the world, helped inject positivity and forward momentum to the near-stagnant markets.
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 rough directly.
The backing from the Government has raised our morale and boosted our confidence to take this industry to newer heights. With the coming of the vaccines, we believe that the worst of the pandemic is behind us.