Gems and Jewellery industry disappointed over status quo on India Gold import duty

GJF feels that the G&J industry is being discriminated against because excise duty relief has been granted to luxury items such as large/ mid-sized cars & SUVs under the pretext that the automobile industry is..

MUMBAI (Commodity Online):

The All India Gems and Jewellery Trade Federation (GJF), the national trade federation for the promotion and growth of trade in Gems and Jewellery (G&J) Industry across India, has expressed deep disappointment and shock at the Interim Budget proposals that are anti jewellery sector, depriving livelihood of millions of people engaged in the sector.

“It is anti-people budget impacting over three crores people as the Finance Minister ignores the plight of jewellery artisans and craftsmen”, said Mr. Haresh Soni, Chairman, GJF. “The entire Gems & Jewellery Industry is deeply disappointed and shocked at the insensitive treatment meted out to it by the Government. The Government seems to be inconsiderate to the plight of lakhs of families of goldsmiths and craftsmen, who are suffering due to lack of job work and thereby threatening their livelihood. The Government is also turning a blind eye to the increasing instances of gold smuggling that is not only creating a parallel economy but also threatening the security of the country due to rise in anti-social activities”, Mr Soni said. Even Gjf suggestions to control CAD thrown out of window as it demanded that the 80:20 must be withdrawn and duty must be brought down to 2%. Government now should roll back the restricted policy as the Current Account Deficit has reduced substantially. Such policy reversal would also curve the growing black marketing activities in the trade.”

GJF has reiterated that the Government’s recent policies such as 80:20 scheme has resulted in high premium and monopolized business environment, destroying the organized G&J industry as well as lead to unemployment and starvation amongst the workforce.

The domestic gems and jewellery industry, which employs 40 lakh people, had a market size of Rs. 251,000 crore in 2013, with a potential to grow to Rs. 500,000-530,000 crore by 2018 (FICCI-AT Kearney Report 2013). But its growth has been curbed after the ‘Gold Control Raj’ was imposed in the country in August 2013 and after the Government sought to restrict gold imports under 80:20 scheme.

Reiterating that gold cannot be considered as the only factor responsible for the growing current account deficit, GJF said that the Government should recognize people’s sentiments to consider gold jewellery as the best social security and also preserve the centuries old jewellery design legacy of India. If India’s artisans, craftsmen and goldsmiths don’t survive, then the country’s centuries old heritage of jewellery making will die a natural death and will be lost forever!

“We urge the Government to keep import duties on gold low to eliminate smuggling; and immediately remove the 80:20 Rule while allowing consignment gold imports to ensure fair open market controlled business. We urge the Government to keep import duties on ready finished imports moderately high to protect Indian industry, still not banning imports. Competition from overseas is important for keeping domestic jewellary manufacturing industry competitive in design and quality.” Mr Soni said.

GJF also expressed disappointment that while the Union Finance Minister spoke about the fall in manufacturing investment worrying and attracting capital investment, the manufacturing facilities in the G&J industry were lying unutilized due to Government policies. The Indian G&J sector has not attracted any national or international investment in jewellery manufacturing and the technology has not been upgraded to keep pace with global tools & techniques.

On one hand, the Government was encouraging the National Skills Development programme and sector mentor counsel by labor employment department, but on the other hand, its policies resulted in driving lakhs of jobless artisans and craftsmen towards suicide. The Government was promoting entrepreneurship but discouraging it in the G&J sector, as per the GJF. The Government seems to be controlling fiscal deficit at the cost of sacrificing the indigenous G&J industry.

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