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Centre proposes jewellery parks on unused Special Economic Zone land

Commerce ministry to discuss proposal with FinMin

Dilip Kumar Jha  |  Mumbai 

Jewellery
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There is a proposal from within the central government for setting up jewellery parks in unused Special Economic Zones’ (SEZ) land.

The ministry of commerce will suggest this to its finance counterpart, said Piyush Goyal, Union minister of commerce and industry, in a Gem and Jewellery Export Promotion Council (GJEPC) event. The parks would be for domestic gems and jewellery makers, he said.

While many SEZs have accommodated jewellery manufacturing units, there is no specific or cluster in any.

“The sector will immensely benefit from jewellery parks in terms of a common facility centre, associated services like banks and accommodation for karigars (workers), among others,” said Colin Shah, vice-chairman of the GJEPC.

Goyal suggested gems and jewellery exporters enroll in the Nirvik scheme (also known as ECIS or Export Credit Insurance Scheme), announced in September by the Export Credit Guarantee Corporation of India (ECGC), to ease the lending process and enhance loan availability.

At present, those in the sector are facing a huge working capital squeeze because of stringent policies set by lenders since the massive Punjab National Bank-Nirav Modi scam two years ago.

Centre proposes jewellery parks on unused Special Economic Zone land

Nirvik aims to increase export and offers a series of benefits for shipments. The aim is to help make our export competitive and ECGC procedures friendlier, with a scheme for reimbursing of taxes, reduced insurance cost and so forth.

“The enhanced insurance cover will ensure that foreign and rupee export credit interest rates will be below four and eight per cent, respectively, for exporters. It will catalyse banks to enhance the volume of export credit lending, especially to the MSME (medium, small and micro enterprises) sector, with optimal pricing due to capital and risk optimisation. Self-regulation will also help enhance credit flow and the industry can win the confidence of banks. In the long run, create your own pool of funds,” Goyal said.

The insurance cover in Nirvik covers up to 90 per cent of principal and interest, with both pre and post-shipment credit. ECGC currently provides credit guarantees for up to 60 per cent loss.

Goyal asked the industry to formalise a policy that would help bring household and gold reserves into the system or to banks, consequently reducing dependency on imports.

First Published: Fri, December 20 2019. 00:43 IST
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