Jewellery exports poised for decline
Jewellery exports are likely to decline 30 per cent in 201718 due to taxes imposed in India and the United Arab Emirates (UAE).
The Gems and Jewellery Export Promotion Council (GJEPC) estimates a 26.21 per cent decline in India’s net jewellery exports, year- onyear, to $1.89 billion in July. Gold jewellery exports declined 31.67 per cent to $411.37 million in July.
Indian exporters use the UAE not only as a trading hub but also as a re-packaging centre for re-routing jewellery to the EU.
“The reason for the decline in exports is the goods and services tax (GST). Because of this levy, nominated agencies stopped importing gold,” said Sabyasachi Ray, executive director, GJEPC.
Gold importers need to deposit the applicable I- GST. The levy is larger than the value addition of 4 per cent in the industry, according to Ray. The UAE has also levied a 5 per cent import duty from January.
The GJEPC and the Surat Diamond Association have written to the commerce ministry seeking exemption of the 0.25 per cent GST on rough diamond imports and 5 per cent on job work.
“If not addressed, India will lose the diamond processing business to China,” said Dinesh Navadia, president, Surat Diamond Association. “India’s jewellery exports could come to a standstill in the near future,” said Rajesh Mehta, managing director, Rajesh Exports.
Gold jewellery exports declined 31.67% to $411.37 mn in July