Growing US economy adds to surge in India's gold jewellery exports from SEZ

Mumbai (Nov 24)  India's gold jewellery exports from special notified zones (SNZs) including special economic zones (SEZ) and export processing zones (EPZ) have almost doubled during the April–October 2018 due to strong growth in demand from the United States, the country which contributes nearly 40 per cent of the world's gems and jewellery demand.

Data compiled by the apex industry body the Gems and Jewellery Export Promotion Council (GJEPC) shows India's overall exports of gold jewellery from SEZ/EPZ worth $5.39 billion for the period between April and October 2018, a rise of 82 per cent from $2.96 billion in the corresponding period last year. In rupee term, however, India's overall gold jewellery exports jumped by a staggering 95 per cent to Rs 37.32 billion for the so far this financial year ending October 2018 from Rs 19.13 billion in the same period previous year.

Interestingly, gold jewellery exports from the domestic tariff area (DTA) declined by 11 per cent in dollar term and 3.61 per cent in rupee term to $1.82 billion (Rs 12.67 billion) for April – October 2018 from $2.04 billion (Rs 13.15 billion) in the same period last year.

“All export centric large gold jewellery manufacturing units exist in special economic zones which mostly focus on developed countries primarily the United States of America. Since, the US economy has seen resurgence in the last few quarters, India’s gold jewellery exports have jumped during April – October period this year. By contrast, however, jewellery manufacturing units in the domestic tariff area (DTA, outside SEZ) are of small and medium size which primarily focus on small scale volume exports to the regions like Middle East,” said Praveen Shankar Pandya, former Chairman, GJEPC.

Overall gems and jewellery exports which contribute nearly 13% of India’s gross domestic products (GDP), recorded a marginal 3 per cent growth in dollar term and 4.5 per cent decline in the rupee value.

Colin Shah, Vice Chairman of GJEPC, however, said that the Council was yet to arrive at a conclusion on the growth in gold jewellery exports from SEZ/EPZ. Shah, however, termed the growth as “unusual.”

Meanwhile, gold jewellery think tank who congregated in New Delhi on the occasion of India Gold & Jewellery Summit 2018 on Friday anticipated major import duty cut in gold in coming months. “The Union Finance Minister Arun Jaitley hinted at pre-Budget sops to industries in December as a pre-curser to the Union Budget 2019. We expect a massive import duty cut in gold,” said a senior industry official.

Speaking on the occasion, the Union Commerce Minister Suresh Prabhu, said, “The gem & jewellery industry can grow exponentially due to the presence of a substantially strong ecosystem around gold in the country. Out of the total gold imported only 10 per cent is exported as jewellery as we have a strong domestic demand and market. The gem and jewellery industry has to upscale and upgrade infrastructure and comply with global standards to make its mark across the world.”

He further added that GJEPC should continue forging deeper partnerships with prospective countries and tap the vast economic and employment opportunities in this business.

Meanwhile, the government is in the process to finalize the Gold Policy which will help gold jewellery industry prosper further.

Speaking on the occasion, Anup Wadhawan, Commerce Secretary stressed upon the self regulation of the industry and being compliant which will help the industry to grow.

BusinessStandard