Exporters of gems and jewellery have said the free-trade agreement (FTA) has brought relief to their sector because this opens up the world's second-largest market and brings them on a par with China and Thailand, which face zero tariffs on shipments to Europe.
India's gems & jewellery exports witnessed 30.6 per cent year-on-year (Y-o-Y) contraction in October to $2.17 million, amid the imposition of a steep 50 per cent tariff by the United States (US) on several Indian products.
The Gems and Jewellery Export Promotion Council (GJEPC) has urged the Centre to provide immediate relief measures as the tariffs imposed by the United States have started hitting the industry. US tariffs of 50 per cent on Indian goods came into effect on August 27.
On August 7, the US president announced doubling tariffs on Indian goods to 50 percent for India's purchases of Russian crude oil, but gave a 21-day window to negotiate an agreement.
The USA's steep 50 per cent tariffs on Indian goods entering America will severely impact exports and job creation in labour-intensive export sectors such as shrimp, apparel, leather and gems and jewellery. Exporters said that the imposition of a 25 per cent penalty on India over and above the 25 per cent tariffs move will disrupt the flow of Indian goods to its largest export market.
'We will be able to anticipate the full picture of the impact after August, which is also the time when demand for a year begins to peak ahead of the December holidays and Valentine's Day.'
'That combination of a rising economy, a growing middle class, and a deepening love of diamonds and jewellery is what we see really doubling the market for diamonds over the next five years.'
Gem and Jewellery Export Promotion Council says step will balance trade deficit with the US.
The US retaliatory tariffs are a major setback for the Indian gems and jewellery exports, apex industry body GJEPC said on Thursday as it urged the government to take steps to secure the long-term interest of the sector. The US has announced 27 per cent reciprocal tariffs on India saying New Delhi imposes high import duties on American goods, as the Donald Trump administration aims to reduce US' trade deficit and boost manufacturing.
Exporters on Thursday sought a fund of Rs 750 crore for three years to tap USD 25 billion export potential in the US, aiming to seize potential opportunities that may arise as the US President-elect, Donald Trump, has threatened to impose high tariffs on Chinese goods. In its pre-Budget meeting with the finance ministry, Federation of Indian Export Organisations (FIEO) President Ashwani Kumar has also demanded extension of the five per cent Interest Equalisation Scheme (IES).
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Gold, a safe-haven bet, is likely to continue its record-smashing journey in the New Year, rising to Rs 85,000 per 10 grams and even Rs 90,000 level in domestic markets if geopolitical tensions and global economic uncertainties continue.
Gems and Jewellery Export Promotion Council (GJEPC) has urged the government to reduce import duty on gold to 4 per cent from 7.5 per cent and a special package for the sector in the forthcoming Budget to boost shipments. As part of its pre-Budget recommendations, the council has also suggested a reduction in the import duty on cut and polished diamonds; cut and polished precious and semi-precious gemstones from 7.5 per cent to 2.5 per cent. "If (gold) imported at 4 per cent duty rate....working capital amounting to Rs 225 crore would be blocked instead of Rs 500 crore," the council said in a statement.
A yellow glow is likely to stand out amid grey geopolitical clouds in 2023, with gold price projected to touch Rs 60,000 per 10 grams in the Indian market as more investors veer towards safe-haven assets. In a year where volatility was more a norm than an exception, gold prices in the international market oscillated from a peak of $2,070 per ounce in March to a low of $1,616 per ounce in November and is steadily recovering since then, according to market experts. At the beginning of 2022, gold prices were around $1,800 an ounce.
Exporters on Thursday demanded fiscal incentives, tweaking in customs duties on certain products and credit at affordable rates in the forthcoming Budget to boost exports and create jobs. In a pre-budget virtual meeting with Finance Minister Nirmala Sitharaman, the Federation of Indian Export Organisations (FIEO) said the depreciation of the rupee against the US dollar is affecting exports' competitiveness and the sector requires more support. "Creation of employment is the biggest challenge faced by the country...We would urge the government to provide fiscal support to units which provide additional employment in the export sector," the exporter's body said.
The industry body has issued two advisories in an attempt to restore jewellers credibility in the wake of the Rs 12,000-crore PNB-Nirav Modi scam, and recent defaults by two domestic jewellers - Goodwin and Rasiklal.
India's direct import of roughs was $767 million from Russia in 2013, a little less than five per cent of India's total import of roughs.
Exports of cut and polished diamonds during April-May witnessed a 77.42 per cent decline, gold jewellery exports declined 92 per cent and shipments of coloured gemstones also dipped 92.90 per cent.
As Wal-Mart's disclosures on lobbying generated political heat in India, records with American House of Representatives show that around 27 Indian companies have spent money on lobbying in the US.
The labour-intensive sector contributes about 15 per cent of the country's overall exports.
Post global slowdown scenario, Surat's diamond industry is gaining momentum in demand from the domestic, international and emerging markets like China, industry sources said today.
The US is the largest consumer of gems and jewellery in the world contributing nearly 40 per cent of global production. If India can tap the opportunity, its overall exports to the US could jump by 10 per cent to $ 11 billion this year.
There are around 15 lakh diamond workers in Gujarat, including nearly seven lakh employed in units in Surat, which is the largest hub of cutting and polishing of these precious stones.
Demand is weak in traditional markets like US and EU.
Twelve of the 22 Indian diamond traders, detained in China on charges of smuggling, returned home early on Friday after they were let off following deportation orders by a Chinese court. "We are happy that 12 diamond traders held in China returned to India late last night. We are making all efforts to bring back the remaining traders," Gems & Jewellery Export Promotion Council Chairman Rajiv Jain said.
These exports stood at $3.3 billion in the same period last fiscal, according to the data provided by the Gems and Jewellery Export Promotion Council.
Surat Diamond Association, the apex body of diamond industry in Ahmedabad, has said there should be a special force for the security of diamond industry in the wake of serial blasts in Mumbai.
The show will commence on July 31.
In September last year, the exports stood at $3.5 billion, according to the Gems and Jewellery Export Promotion Council.
The decline in gold imports has helped in narrowing the country's trade deficit to $106.84 billion during the eight-month period under review as against $133.74 billion in the year-ago months.
The Gems & Jewellery Export Promotion Council (GJEPC), the apex body set up by the Union ministry of commerce to monitor the jewellery business overseas, says it might call for pulling out of the diamond cutting and polishing business in China.
Gems and jewellery exports are set to rise 17.8 per cent to $33 billion.
India imports gold worth $26 bn in Apr-Dec period.
India's gems and jewellery exports grew by 16 per cent at $28 billion last fiscal due to revival in demand in major markets as well as recycling of used diamonds, a top industry official said.
India's gems and jewellery export grew by 16 per cent to $28.41 billion in 2009-10 due to revival in demand from major markets like the US and Europe.
India has offered African countries --Botswana, Angola, South Africa and Namibia, incentives to strengthen their jewellery industry in return for direct procurement of rough diamonds from these countries.
Exports from the world's largest supplier of gems and jewellery were valued at $1.87 billion in May 2009.
Imports of rough diamonds at $7,249.39 (Rs 32,839.73 crore) million in April 08 - February 09 have shown a decline of dollar term 20.12 per cent (11.31 per cent in rupee term) compared with $9,075.36 million (Rs 37,027.47 crore) in the same period last year. The marginal growth in exports of cut and polished diamonds in the year 2008-09 from the corresponding period of last year is due to increase in the trading activities of cut and polished diamonds.
Last fiscal, diamonds worth about $900 billion were sold globally of which those worth about $20 billion came back to India for recycling.
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