Gems, jewellery get a new shine
The annual supplement to the Foreign Trade Policy has come as a shot in the arm for the gems and jewellery sector.india Updated: Apr 08, 2006 02:03 IST
The annual supplement to the Foreign Trade Policy has come as a shot in the arm for the gems and jewellery sector, with the government facilitating export of value-added products and easing product movement norms for the industry.
The biggest boost is likely to come from allowing import of precious metal scrap and used jewellery for melting, refining and re-export purposes.
Underlining the need for sops for this sector, Union Minister for Commerce & Industry Kamal Nath said: “The diamond trade, which was concentrated in Antwerp, is moving to Dubai and Tel Aviv. But with rich tradition of craftsmanship, enterprise and availability of skilled manpower, India can be a strong contender for this position. Mumbai must not lose out to the other Asian cities.” The import of precious metal scrap and used jewellery will enable the industry to utilize melting, refining and jewelry making production capacity. Exporters will now be allowed to re-import the rejected precious metal jewelry subject to refund of duty exemption benefits on the inputs only. They will, however, not be able to claim exemption on jewelry.
In order to factor in the dynamic fashion environment abroad, exporters will now be allowed to export in consignments. This will overcome the problem of obsolescence of designs and unsold items in the foreign markets. Keeping in mind the increase of gold and silver prices in the international market, the government has also reduced the value addition norm for related items from 7 per cent to 4.5 per cent. For other items, the value add norm is 20 per cent.
Under the new regime, exporters will be allowed to export and subsequently, re-import precious and semi-precious stones for cutting and polishing within a period of 120 days. This will enhance the value of the said items. Cutting down on the transaction costs for exporters, the annual supplement of the trade policy has exempted the gems and jewelry exporters from compulsory bank guarantee requirements.
“The announcements would have a positive impact on the growth of gems and jewelry industry in the country and our exports would grow by 20 to 25 per cent,” according to Srenuj and Company Managing Director Shreyas Doshi.