The gems and jewellery industry has entered a state of turmoil with the fall in exports increasing month after month. After an over 11 per cent fall in July, overall gross exports of gems and jewellery declined 14.44 per cent to $28.84 billion in August. The Gem and Jewellery Export Promotions Council’s (GJEPC) provisional data shows that during the current financial year, total gross exports have declined 8.92 per cent to $15.33bn.
However, Council's officials said that with exports to the US reviving in August, enquiries have started coming in from US and European customers and the industry is eyeing good business from these two markets during the Christmas season. Gold jewellery exports to the US in August increased 5.58 per cent to $910.87 mn. With this, the decline in exports between April to August has been arrested and is now lower by only 4.28 per cent at $5.02 billion.
The ongoing US-China trade war has also made India’s gem & jewellery exports viable. A higher US tariff on Chinese jewellery is crucial for India, which hopes to cover some lost ground by increasing exports to US.
“An industry which took 50 years to build its global leadership, is today in a state of turmoil. This is due to the unfavourable perception of bankers and government about trade due to the wrongdoings of a few,” said Colin Shah, vice chairman, GJEPC.
With exports of cut and polished diamonds falling 24.86 per cent to $1.64 billion, the export of gold jewellery to the US is the only category where some optimism is still visible. Moreover, a falling rupee has also ensurd that the losses in rupee terms are not significant.
The industry has already sought government's help in the matter. “To be globally competitive, we urgently need a reduction in duty on gold and polished diamonds. We also need ease of doing business on the GST and customs side,” said Shah.
Industry’s other demands include, a progressive SEZ policy which allows companies to invest and thrive with a stable set of rules on domestic area sales and property transfer (in SEZ) with an e-commerce policy.
The industry has conveyed to the government that any delays in taking supportive measures would only worsen the situation. Thailand and Vietnam have already stolen a march over India with Thailand’s jewellery exports reporting an increase of 29 per cent in April-July.
“We cannot possibly be world leaders in exports with such a high duty structure and taxation regime. We hope to get some respite soon,” Shah said.