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Gemstones expot import
1. REGULATING BODIES
Gems & Jewellery Export Promotion Council
(GJEPC)
•The Gem & Jewellery Export Promotion Council (GJEPC) was set up by the
Ministry of Commerce, Government of India (GoI) in 1966.
•The primary goal of the Council is to introduce the Indian gems and jewellery
to the international market and to promote their exports.
•The primary goal of the Council is to introduce the Indian gems and jewellery
to the international market and to promote their exports. The Council provides
market information to its members regarding foreign trade inquiries, trade and
tariff regulations, rates of import duties, and information about jewellery fairs
and exhibitions.
2. ROLE OF GJPEC
Trade Facilitator: The Council promotes the Indian gems and jewellery
industry in the international market. It organises international jewellery
shows, hosts trade delegations, and undertakes image-building exercises
through advertisements, publications and audio-visual means.
Advisory Role: The Council also aids better interaction and understanding
between traders and government. The Council takes up relevant issues
with the government and agencies connected with exports. It also submits
documents for consideration and inclusion in the Exim Policy
3. GOVERNMENT INITIATIVE TO
BOOST THE SECTOR
Measures taken by the government in the Union Budget 2009-10: Excise duty on
branded articles of jewellery to be reduced from 2% to nil.
All categories within HS code 71 except the ‘diamonds whether or not worked but not
mounted or set’ (HS code 7102) and certain sub-categories within HS code 7104 and
7106 currently have an excise duty rate of 16%.
The category ‘diamonds whether or not worked but not mounted or set’ (HS code 7102)
currently does not attract any excise duty.
Sub-category ‘Piezo-electric quartz’ (HS code 71041000), silver (including silver plated
with gold or platinum) in powdered form (HS code 71061000), unwrought (HS code
71069100) and other (HS code 71069290) do not attract any excise duty.
Export Facilitation Measures by the Ministry of Commerce and Industry:
The authorized persons of gems and jewellery units in export-oriented units will be
allowed to carry personal carriage of gold in primary form up to 10 kg in a financial year
subject to the RBI and customs guidelines.
4. GOVERNMENT INITIATIVE TO BOOST
THE SECTOR
Foreign Trade Policy 2009-2014- The highlights of the policy are:
• Duty Free Import Entitlement (based on FOB value of exports during the previous
financial year) of consumables and tools, for: Jewellery made out of:
– Precious metals (other than gold and platinum) – 2%
– Gold and platinum – 1%
– Rhodium finished silver – 3%
– Cut and polished diamonds – 1%
– Duty free import entitlement of consumables for metals other than gold,
platinum will be 2% of FOB value of exports
• To promote export of gems and jewellery products, the value limits of
personal carriage of gems and jewellery products in case of
holding/participating in overseas exhibitions increased to US$ 5 mn and to
US$ 1 mn in case of export promotion tours. Further, the limit in case of
personal carriage, as samples, for export promotion tours, has been
increased from US$ 0.1 mn to US$ 1 mn.
• Extension in number of days for re-import of unsold items in case of
participation in an exhibition in the US increased to 90 days
5. INVESTMENT/DEVELOPMENTS
The sector is witnessing changes in consumer preferences, as the
westernisation of lifestyle is responsible for changes in the buying habits of
the consumer.
Consumers are demanding new designs and varieties in jewellery, and
branded jewelers are able to fulfill their changing demands better than the
local unorganized players.
Increase in per capita income has led to an increase in sales of jewellery, as
jewellery is a status symbol in India.
6. INVESTMENT/DEVELOPMENTS
Jewellery major Joyalukkas has planned to invest Rs 1,500 crore (US$ 241.74 million)
on its expansion plan that entails setting up 20 stores in India and 10 overseas. The
new stores, which will come up almost in an year’s time, will add to the Thrissur-
headquartered company's existing 95 outlets.
London-headquartered Gemfields, a multi-national firm specialising in colour
gemstones mining and marketing, is planning to acquire colour gemstone mines in
Odisha and Jharkhand, and participate in the exploration of the Kashmir sapphire
mines in Jammu & Kashmir.
In one of the largest private equity (PE) deals in the jewellery manufacturing segment,
firm Warburg Pincus has picked up a minority stake in Kerala-based jewellery maker
and retailer Kalyan Jewellers for Rs 1,200 crore (US$ 193.41 million). The jeweller will
use the proceeds from the deal to fund its retail and manufacturing expansion plans.
7. INVESTMENT/DEVELOPMENTS
The government is discussing a plan to set up a special zone with tax
benefits for diamond import and trading in Mumbai, to try and develop the
country's financial capital as a competitor to Antwerp and Dubai, which are
currently trading hubs for the precious stone.
Well-known jewellery retailer In India Tribhovandas Bhimji Zaveri Limited
(TBZ) is inviting franchisees to be a part of its jewellery retailing business.
Through the TBZ Franchising opportunity, entrepreneurs can open TBZ-The
Original stores across India and retail the brand's product, which includes
over 20,000 in-house designs. TBZ Ltd plans to open franchisees in cities
across India where it is not present at this point of time through its
exclusive brand outlets (EBOs).
8. CHALLENGES FACED BY THE INDUSTRY
Highly import dependent The biggest challenge faced by the industry is that it is entirely
dependent on imports. Gold is the second-largest import item after crude oil.
Consequently, any regulatory changes affecting gold imports directly impact the industry.
Although the recent curbs on gold imports were intended to lower the CAD, they restricted
the growth of the gems and jewellery industry.
Limited recycling of gold Limited recycling of gold poses yet another challenge to the
industry. Recycled gold accounted for less than 1% of above ground gold stock in India in
2012. Recycling would have eased the dependence on imports.
No demarcation of regulations between consumption and investment Regulations do not
demarcate between the consumption and investment side of the markets. The increasing
demand for gold bars and coins for investment purpose increases the import bill of the
country. Regulations aimed at lowering imports adversely affect the consumption market
as well.
9. Limited finance options for jewelers: Jewelers are faced with limited financing options
such as gold loans and short-term bank loans. Although local manufacturers cannot avail
gold loans, short-term bank credit is the only option available to them. The high interest
rates coupled with high raw material costs proves costly for jewelers.
Shortage of skilled labor: Even though the industry employs a huge workforce, it faces
shortage of skilled labor. The constantly changing trends in jewellery designs require skill
availability and skill development, which the industry severely lacks.
Limited investment in new technology, R&D: Investment in research-based design
innovation and technology up gradation is also limited. New technology would help in
quality and cost-control and a better finish, while internationally prevalent designs would
fetch a premium in the international markets.
CHALLENGES FACED BY THE INDUSTRY
10. FUTURE OF INDUSTRY
In the coming years, growth in the industry would be highly contributed with the development of the
large retailers/brands.
Established brands are guiding the organized market and are opening opportunities to grow.
Increasing penetration of organized players provides variety in terms of products and designs. These
players are also offering financing schemes to consumers to further boost sales.
Also, the relaxation of restrictions of gold import is likely to provide a fillip to the industry.
The improvement in availability along with the reintroduction of low cost gold metal loans and likely
stabilization of gold prices at lower levels is expected to drive volume growth for jewelers over short to
medium term.
The demand for jewellery is expected to be significantly supported by the recent positive developments
in the industry.