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.
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.
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.
India and the European Union are set to announce on January 27 the conclusion of negotiations and finalisation of a free trade agreement, which is aimed at boosting economic ties between the two regions amid disruptions in global trade due to US tariffs, an official said.
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.
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.
State governments have requested the Centre for export incentives, lifting of import duty in the case of cotton for the textile sector and GST exemptions.
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.
Communication channels between India and the US are open to resolve the ongoing tariff issues, and the glitch in trade ties is only temporary, given the long-term relationship between the two nations, government sources said on Wednesday. The US' 50 per cent tariffs on Indian exports to America came into effect from August 27, barring a few sectors.
'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.
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.
India's exports rose 9.03 per cent to $38.49 billion in April, the highest in six months, driven by healthy growth in sectors such as electronics and engineering goods, while the trade deficit widened to a five-month high of $26.42 billion. According to the commerce ministry data released on Thursday, imports increased by 19.12 per cent year-on-year to $64.91 billion in April due to a rise in shipments of crude oil and fertiliser.
After registering a positive growth for two months, India's exports slipped into negative territory again, contracting 2.17 per cent year-on-year to $38.73 billion in May due to a fall in global petroleum prices, while trade deficit narrowed at $21.88 billion during the month.
Simplifying GST rates, removing exemptions, easing disputes, and speeding up refunds can boost investment in India and offer the best reply to Trump's tariffs, observes V S Krishnan, former member, Central Board of Indirect Taxes and Customs.
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).
Gems and jewellery exports are set to rise 17.8 per cent to $33 billion.
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.
The labour-intensive sector contributes about 15 per cent of the country's overall exports.
In September last year, the exports stood at $3.5 billion, according to the Gems and Jewellery Export Promotion Council.
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.
The show will commence on July 31.
India and China are together expected to equal world's largest jewellery market, the United States, by 2015 when the global gems and jewellery trade is expected to touch $230 billion, states a new industry report.
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.
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.
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.
The Gem and Jewellery Export Promotion Council of India has announced the performance figures of the sector for January-December 2004.
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.
Exports from the world's largest supplier of gems and jewellery were valued at $1.87 billion in May 2009.
The growth came at a time when exporters had been complaining about reduced margins and weak export performance due to the strengthening rupee.
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.
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.
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.
Suddenly, the legendary advertising line -- a diamond is forever -- is losing its shine.
Demand is weak in traditional markets like US and EU.
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