The $27-billion Indian gems & jewellery sector, which had a torrid time after the financial crisis broke out, has most of its wishes fulfilled in the trade policy. The sector, which contributes 13% to India’s total exports, has received a host of incentives, including input duty refunds (under duty drawback scheme) on gold jewellery export and setting up of diamond bourses to make the country a diamond-trading hub.
“It shall be our endeavour to make India an international diamond-trading hub and we plan to establish diamond bourses in the coming years,” commerce minister Anand Sharma said unveiling the new Foreign Trade Policy.
The Rs 80,000-crore diamond cutting & polishing industry that has an 80% global marketshare has suffered heavily because of the recession in the world’s largest diamond markets, the US and Europe. Surat, the diamond city, saw more than 3,000 units shutting down with around 4 lakh workers losing jobs in Gujarat alone.
Sanghavi Exports chairman Chandrakant Sanghavi said: “India is the global hub for diamond cutting and polishing. However, we source rough diamond from Antwerp and supply polished diamonds to New York and Hong Kong. Still, we are nowhere in the diamond-trading business. With bourses being set up, India can create a strong position, where sellers of rough stones and buyers of polished diamonds will have to visit India.”
The increase in personal jewellery carriage limit to $5 million from $2 million would also help the industry promote exports, as it will be able to showcase more jewellery in exhibitions abroad.
“This is a good policy for the sector. Our demand to allow tax refund on gold jewellery export has been accepted. The move will encourage even small players to enter the export market,” Vasant Mehta, chairman of the Gem & Jewellery Export Promotion Council (GJEPC) told ET.
The government has allowed import of diamonds for grading and certification. Mr Mehta believes this will help institutes like the Indian Diamond Institute. Earlier, local companies had to compulsorily buy the precious stones even for grading. Now this will become easier.
The industry was, however, disappointed that the interest subvention or the discount on interest rates on loans was not increased to 4% from the existing 2%.
Source : The Economic Times