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.
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 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.
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.
Exports of jewellery from India have gone up 32 per cent in the last two months ended May thanks to increasing demand and sale diamonds abroad.
Gems and Jewellery exports from India would exceed $10 billion in 2003-04 as against the $9.1 billion in the last fiscal even as exporters have set a target of $16 billion by 2007.
Export of Indian gems and jewellery is unlikely to surpass previous records, given the volatile price of gold and the consumers' increased inclination toward luxury items like perfumes and watches.
In September last year, the exports stood at $3.5 billion, according to the Gems and Jewellery Export Promotion Council.
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.
The Gem and Jewellery Export Promotion Council of India has announced the performance figures of the sector for January-December 2004.
Exports from the world's largest supplier of gems and jewellery were valued at $1.87 billion in May 2009.
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.
The labour-intensive sector contributes about 15 per cent of the country's overall exports.
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.
During 2012-13, the gems and jewellery exports declined by 9.4 per cent year-on-year to $39 billion due to sluggish demand in traditional markets.
The government was close to imposing presumptive tax and the goods and services tax on the gems and jewellery sector
Owing to increased demand by Americans, the Gems and Jewellery Export Promotion Council expects a 35 per cent increase in jewellery exports to the US at $5.88 billion this fiscal.
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.
Demand is weak in traditional markets like US and EU.
When overall gems and jewellery exports remained resilient so far this year on global economic uncertainty, shipment of silver jewellery witnessed a phenomenal growth so far this year.
The fall in exports of gems and jewellery exports is mainly because of shortage of raw-material for jewellery manufacturing.
Textiles, pharmaceuticals, chemicals, engineering goods, gems and jewellery exports will receive a boost from the free trade agreement between India and the 27-nation European Union, according to exporters.
It may touch Rs 19,800 crore.
After China imposed a national security law on Hong Kong earlier this month, the United States on July 14 withdrew the special status granted to Hong Kong, and the United Kingdom, Australia, and Canada followed suit.
De Beers, the world's premier source for rough diamonds, has painted an attractive picture for jewellery demand.
The sector employs around 1 million skilled and unskilled workers directly and indirectly and decline in exports is a major worry for participants in the value chain.
Indian jewellers such as Gitanjali Gems, Malabar Gold and Kalyan Jewellers have opened stores abroad to limit the slump in sales.
Exports of gold jewellery fell 23.13 per cent to $1153 million.
Gold jewellery exports may decline by about 50 per cent in this financial year from last year after government restrictions reduced the availability of raw material, Gitanjali Gems Chairman and Managing Director Mehul Choksi said.
The country's exports rose marginally by 0.61 per cent to $36.56 billion in January, while trade deficit widened to a three-month high of $34.68 billion, government data showed on Monday.
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.
The growth came at a time when exporters had been complaining about reduced margins and weak export performance due to the strengthening rupee.
Indian jewellery is widely prized for intricacy and craftsmanship.
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.
Gem and Jewellery Export Promotion Council on Wednesday said it expects to attract foreign direct investment worth $2 billion in this fiscal besides a growth of 20-25 per cent.
Gem and Jewellery Export Promotion Council says step will balance trade deficit with the US.
In India 24-carat gold is used mostly in coins and bars
Gems and jewellery exports are set to rise 17.8 per cent to $33 billion.
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