Gold is driving the gems and jewellery export orders from India. According to the Investment Commission of India, exports are likely to grow to US$ 25 billion by 2012. Following are some of the India government steps to boost gold trade in the country.
India Government Initiatives
The Indian government has provided an impetus to the booming gems and jewellery industry with favourable foreign trade policies:
- 100 per cent foreign direct investment (FDI) in gems and jewellery through the automatic route is allowed
- The government has lowered import duty on platinum and has exempted rough coloured precious gem stones from customs duty
- Rough, semi-precious stones are also exempt from import duty
- Duty-free import of consumables for metals other than gold and platinum up to 2 per cent of freight on board (f.o.b) value of exports
- Duty-free import entitlement for rejected jewellery up to 2 per cent of f.o.b value of exports
- Import of gold of 18 carat and above under the replenishment scheme
- Setting up of SEZs and gems and jewellery parks to promote investment in the sector
- In May 2007, the government abolished import duty on polished diamonds
- The government has raised the limit value of jewellery parcels for export through foreign post office from US$ 50,000 to US$ 75,000 and the time period for re-import of branded jewellery remaining unsold has been extended from 180 days to 365 days
- The export of coloured gemstones on a consignment basis has been allowed. The government has announced a series of measures to help gems and jewellery exports in the Foreign Trade Policy 2009-14.
- It has been decided to neutralise duty incidence on gold jewellery exports, to allow duty drawback on such exports
- In an endeavour to make India an international diamond trading hub, it has been planned to establish Diamond Bourses
- A new facility to allow import of cut and polished diamonds on a consignment basis for the purpose of grading/certification purposes, has been introduced
- To promote export of gems and jewellery products, the value limits of personal carriage have been increased from US$ 2 million to US$ 5 million in case of participation in overseas exhibitions. The limit in case of personal carriage, as samples, for export promotion tours, has been increased from US$ 0.1 million to US$ 1 million.
The Road Ahead
• The Indian gems and jewellery sector is excepted to cross US$ 26 billion by 2012, driven by availability of a huge base of skilled labour and improving lifestyle, according to a new report called Indian Gems and Jewellery Market - Future Prospects to 2011, by RNCOS, published in September 2009.
- According to the same report, the Indian gems and jewellery sector is expected to grow at a compound annual growth rate (CAGR) of around 14 per cent from 2009 to 2012.
- According to industry experts the consumption of diamond jewellery in India is expected to touch US$ 6.41 billion in 2012.
- State-run National Mining Development Corp (NMDC) plans to produce close to 100,000 carats of diamonds from the Panna diamond mines in Madhya Pradesh by 2010-11.