Hon. Union Finance Minister Smt. Nirmala Sitharaman, during the presentation of Union Budget 2019-20 on 5 July, announced that import duty was raised from 10 to 12.5% on gold and precious metals, disappointing the country’s gem & jewellery industry.
During the recent months, the Gem & Jewellery Export Promotion Council (GJEPC) had sought rollback and reduction in import duty on Gold and precious metals, as well as the reduction in import duty on cut & polished diamonds from 7.5% to 2.5% from the Union Government.
Mr Pramod Kumar Agrawal, Chairman, GJEPC, said, “The gem & jewellery industry is going through very tough times with decline in exports and job losses and the industry expected some positive announcement as an encouragement to our sector. GJEPC had represented for the reduction in import duty for raw material inputs like gold, diamond and coloured gemstones to get some blocked capital released. Instead, the increase of import duty on gold and silver and not decreasing the import duty on processed diamonds and gemstones will result in the growth of business in neighbouring countries as the foreign tourists will stop buying jewellery from India, and processing of larger diamonds will shift to competing countries such as China and Vietnam. GJEPC will continue to work with the Government to get favourable relief for the sector in terms of duty and ease of doing business at the transaction level.”
Agrawal added that the first Union Budget presented by the first female Union Finance Minister of the Modi 2.0 Government continues the ‘Reform, Perform & Transform’ principles. “India’s Gem & Jewellery Industry desires a level playing field with other world centres to maintain its global leadership position. The cost of doing business has now gone up. We seek a reduction in high import duty on Precious Metals Gold/Silver/Platinum as it is encouraging grey market, hampering Export Competitiveness and resulting in job losses and has not helped in curbing CAD.”
Meanwhile, Pramod Agrawal said that GJEPC welcomes the following proposals:
Agrawal brought to notice that GJEPC :
Agrawal also indicated that GJEPC recommends :
GJEPC hopes that the Government’s initiative of creating world-class universities will also extend to gem & jewellery training and skill development institutes. It also hopes that the Pradhan Mantri Shram Yogi Maan Dhan Yojana pension scheme will benefit lakhs of workers in gem & jewellery businesses.
India’s Gem & Jewellery Industry, a world leader in Cut & Polished diamonds, is a USD 41 billion industry and contributes 7% to India’s GDP and 15% to Merchandise Exports; and employs a workforce of 5 million across India. Indian diamond industry alone provides a livelihood to 1.5 million families and generates value addition in excess of US $ 7 billion
GJEPC has sought the following from the government reduction in Import Duty on Precious Metals Gold/Silver/Platinum from 10% to 4%; Reduction of import duty on cut and polished precious and semi-precious gemstones from 7.5% to 2.5%; Facilitating exports of gems & jewellery through e-commerce; and Special budget provision for inclusion of gems and jewellery merchant exporters under 3% interest equalization scheme.
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