GoI's thrust in increasing exports is crucial to India's growth strategy. Keeping this in mind, the commerce ministry is investing ₹200 crore to spruce up the export-focused manufacturing ecosystem of the Santacruz Electronics Export Processing Zone (SEEPZ) in Mumbai, and ₹70 crore towards the mega common facility centre (CFC) for gems and jewellery in SEEPZ.
The gems and jewellery (G&J) sector contributed nearly 10% of GoI's target of $400 billion exports in 2021-22. The next target is to reach $45.7 billion in 2022-23. A big boost in this direction comes from the two landmark trade agreements signed by GoI - the India- UAE Comprehensive Economic Partnership Agreement (CEPA), and the India-Australia Economic Cooperation and Trade Agreement (ECTA). More free trade agreements (FTAs) with Canada, Britain and the EU are reportedly in advanced stages.
With the India-UAE CEPA that came into effect on May 1, India witnessed a growth of 25% in overall merchandise exports to the UAE in H1 2022-23 compared to the same period last year. CEPA should boost our bilateral trade of bullion and G&J to the tune of $10 billion annually.
Similarly, ECTA is expected to unlock millions of dollars of additional trade due to the preferential access accorded towards India's G&J exports to Australia. The two countries already have bilateral trade of $950 million for G&J commodities.
Key commodities exported to Australia include gold jewellery, and plain, studded and polished diamonds. The main commodities imported from Australia are gold and silver bars. India accounted for about 6% of Australia's total worldwide imports of G&J of $7.63 billion in 2021. ECTA will increase India's share of the pie and be a springboard for future growth.
Australia should also benefit from access to areas where India is a world leader, like diamonds. By providing preferential access for Indian G&J exports, the deal also makes it cheaper for Australian retailers to procure world-class jewellery crafted by Indian manufacturers. ECTA should boost bilateral G&J trade from $950 million today to $1.5 billion.
The entire supply chain of the G&J industry is transforming - from the thrust on the sunshine segment of lab-grown diamonds (LGDs) that has energised India's export performance, to the emergence of hybrid retail models, application of new-age technology for innovative jewellery and the use of artificial intelligence (AI) for sales and consumer data aggregation.
The LGD segment has seen a meteoric rise in exports. In the last five years, India has become the largest manufacturing hub of chemical vapour deposition (CVD) type of LGDs in the world, accounting for 43% of global production and having an estimated 6,000 reactors to produce the LGDs.
Under the Gem and Jewellery Export Promotion Council (GJEPC), the export sector has progressed leaps and bounds since 2014, when it realigned its mission of pushing exports in newer markets, creating additional employment through technological transformation and skill development of workers. To achieve focused growth, GJEPC has played a key role in the policymaking process to help GoI introduce trade-friendly and pragmatic legislation to ensure ease of doing business.
An ecommerce policy for the G&J sector was unveiled in June 2022. With a few tweaks, this policy will be a game changer as Indian jewellery manufacturers will have direct access to jewellery consumers across the world and achieve its objective of becoming 'jeweller to the world'.
At the same time, the Development of Enterprises and Services Hub (DESH) Bill, currently being consulted by a parliamentary committee, is being eagerly awaited to become law. The Act will be critical to the special economic zone (SEZ) ecosystem for the G&J manufacturing ecosystem. From jewellery parks to mega CFCs and cluster development, the G&J sector is all set to take a leap.
Source: Economic Times
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