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High import duty impacts gems, jewellery exports in August

Gems and jewellery exports continued its downtrend registering a fall of 14 per cent in August to $2.84 billion against $3.32 billion logged in the same period last year.

In rupee terms, exports were down 12 per cent to ₹ 20,242 crore (₹ 23,077 crore). The hike in import duty on cut and polished diamond to 7.5 per cent from 2.5 per cent in the Budget to curb round-tripping has impacted gem and jewellery exports as the industry has to pay high duty to bring back the consignments that have been rejected. Import duty on gold was also hiked to 12.5 per cent from 10 per cent.

Colin Shah, Vice-President, Gem and Jewellery Exports Promotion Council said to be competitive globally the industry needs a reduction in duty on gold and polished diamonds besides ease of doing business on the GST and customs side.

Cut and polished diamond exports plunged 25 per cent last month to $1.64 billion as ($2.18 billion). In rupee terms, it was down 23 per cent to ₹ 11,657 crore (₹ 15,159 crore). However, gold jewellery exports jumped six per cent in August to $911 million ($863 million).

Depressing fiscal In first five months of this fiscal, overall exports were down nine per cent to $15.33 billion ($16.84 billion) while in rupee terms it declined 6 per cent to ₹ 1.07 lakh crore (₹ 1.14 lakh crore).

Cut and polished diamond were down 19 per cent to $8.34 billion ($10.30 billion) between April and August.

In rupee terms, cut and polished diamond exports were down 17 per cent in the last five months to ₹ 58,178 crore (₹ 69,907 crore).

Gold jewellery exports dipped 4 per cent to $5.02 billion ($5.24 billion) in the same period and dipped two per cent in rupee terms to ₹ 34 983 crore (₹ 35,544 crore). Silver jewellery export was up by 83 per cent to $437 million ($131 million) between April and August.

Shah said the industry, which took 50 years to build its global leadership, is in a state of turmoil today. This is due to the unfavourable perception of bankers and government about trade due to the wrongdoings of a few, he said.

"The more time we take to rectify the mistakes, the greater is our loss to countries such as Thailand and Vietnam. We cannot possibly be world leaders in exports with such a high duty structure and taxation regime," he added.

The industry has represented the concerns and is optimistic of getting some relief soon given the fact that it is a huge foreign exchange earner, said Shah.

Courtesy - Business Line



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