Here are the key demands of the gems and jewellery industry from the government in the upcoming Union Budget:
The Gem and Jewellery Export Promotion Council (GJEPC) — the apex body of the industry trade in India — on Thursday said it wants the government to introduce a jewellery repair policy to make the country a global outsourcing service centre.
“This will increase India’s market share in the global jewellery repair market estimated to grow to around $ 5.75 billion by 2026. At present, India has a miniscule market share of just 3 percent with a sale of $ 196.8 million while the US. has around 30 percent of the market, followed by China with a share of 9.2 percent,” it said in a statement.
The GJEPC’s chairman Vipul Shah said that with this policy, India has the possibility of taking 10 to 20 percent of the world market share, which would bring in billions of dollars of business with high employment potential.
The statement said the the repair policy’s introduction would result in popular brands setting up their service centres in India, which are currently in Turkey, Dubai, Hong Kong and other sectors.
“Import of all types of jewellery and their repair will involve technological upgradation of jewellery manufacturing in India. Also, this will help large exporters to service their customer’s requirement for repair from India only which they are now forced to do abroad,” the statement added.
The apex body is also requesting that the diamond companies be allowed the sale of rough diamonds in special notified zones (SNZs) via safe harbour rule. This will facilitate the rough diamonds trade with Indian SMEs by the diamond mining companies.
“At least 20 percent of the rough diamond traded in the world will be shifted to SNZs in India due to the level playing field given to the foreign mining companies. The Indian government will be able to collect annually additional tax revenue of $3.48 million. MSME manufacturers of CPD, will save their margins. Russian companies may directly auction their roughs from SNZs and Indian manufacturers may explore buying from them through rupee route,” the statement said.
It has also sought the re-introduction of the diamond imprest licence to provide diamond exporters the leverage to cope with beneficiation policies undertaken by major African mining countries.
“The Diamond Imprest Licence which was there in Foreign Trade policy was withdrawn after the import duty on CPD was abolished in the year of 2009. With re-introduction of import duty on CPD in 2012, the scheme was not re-introduced. However, it may be understood that at least 10 percent of the CPD which the Indian manufacturers do not manufacture has to be brought into the stock as any exporter services or endeavour to service their clients with all types of their requirements,” the statement said.
As for exports, the apex body wants Indian diamond exporters who are above a certain export turnover threshold should be allowed to import at least 5 percent of the average export turnover of the preceding three years, the statement said, adding, “This will provide a level playing field for Indian MSME diamond exporters with that of their larger peers. It will stop flight of investment of Indian diamantaires to diamond mining destinations. It will give more employment in terms of diamond assorters and processing of semi-finished diamonds in the factories.”
The GJEPC said it has urged Finance Minister Nirmala Sitharaman to abolish import duty on lab-grown diamond seeds and introduce measures to make the same manufacturing sector in India a leader in the same.
LGD seeds are rough diamonds that are thinly-sliced, and not cut or polished diamond. It is processed on a side so the surface is smooth to enable the diamond to grow on it.
“The seeds are laser cut from one side and are rough from other side so they are rough LGD only which has 0% import duty. Seeds are so thin and range from 70 cents (5.68 mm) to 80 cents (5.93 mm) which are impossible to be used in jewellery. They are easily distinguishable from that of regular CPD and therefore, duty on seeds may be abolished,” the statement said.