Pramod Agarwal, Chairman of India’s Gem & Jewellery Export Promotion Council (GJEPC), expressed disappointment at the increase in customs duty on cut and polished diamonds and coloured gemstones from 2.5 percent to 5 percent. The increase in duty came as part of the country’s annual budget plan for fiscal 2018-19 announced by Finance Minister Arun Jaitley in Parliament today.
“This move hampers India’s chances of becoming an international diamond trading hub. This move doesn’t provide India a level playing field vis-à-vis other peers such as Belgium, Dubai and Israel. It will also have a negative impact on the shut-out business from the US, which has been a fast growing segment,” Agarwal said in a press statement.
The GJEPC Chairman noted, “The Union Finance Minister mentioned in his budget speech that exports will grow by 15 percent in FY18 and that the government is planning to enhance export growth, but we are awaiting clarity on the specific roadmap for achieving this growth. We welcome the government’s initiative to formulate a comprehensive gold policy to develop gold as an asset class, subsequent to the GJEPC’s Gold Summit held in the capital in December 2017.”
He added, “This will assure a new era of development for the gold market and exports in the sector. We shall continue to seek a reduction in basic import duty on gold, silver and precious metals and hope that it will be considered as part of the gold policy announcement.”
Agarwal went on to say, “It is good that the government will also establish a system of consumer-friendly and trade -efficient system of regulated gold exchanges in the country. The gold monetisation scheme will be revamped to enable people to open a hassle free gold deposit account.”
The GJEPC Chairman was also approving of the government move to cut corporate tax. “The proposal to cut corporate tax for companies with annual revenues of upto ₹250 crore to 25 percent will benefit the gems and jewellery sector but this measure should be also made applicable to all gems & jewellery exporters. The cut in corporate tax will result in more investments and job creation,” he said.
Agarwal noted that the government’s emphasis on education and skill enhancement should be extended to creating more institutes for the gems and jewellery sector.
He welcomed the schemes and increased outlay for micro, small and medium enterprises (MSMEs) as well as the initiative to create a database and identity for them. He also welcomed the government’s move to incentivise domestic value addition and ‘Make in India’ in the gems & jewellery sector in addition to others. He said the benefits extended to leather, textile and footwear businesses should be extended to the gems & jewellery sector also as it is a job-intensive industry.
Agarwal concluded, “In sync with the government’s emphasis on manufacturing and creating infrastructure, more jewellery parks with shared support services and resources can be created to stimulate job creation as mentioned in the Economic Survey. The Finance Minister announced that the Department of Commerce will be developing a National Logistics Portal as a single window online market place to link all stakeholders.”