CHENNAI: Weighed down by a high custom duty of 7.5% on cut and polished diamonds, and a 12.5% import duty for gold introduced in the Union Budget this July, exports of gems and jewellery are seeing a negative trend.
In the first half of the fiscal, the sector saw a decline of 7.5% to $18.8 billion, according to data from the Gems and Jewellery Export Promotion Council (GJEPC).
Among categories, cut and polished diamonds saw an 18.9% decline and gold jewellery saw a marginal drop of 0.67%. Silver jewellery, on the other hand, grew by 73.5%. In rupee terms, the sector saw a 5.7% drop in exports, data from GJEPC said. However, the fall moderated in September to 6.2% sequentially from a 14.4% drop recorded in August.
Traders add that despite an opportunity to expand business on the back of the US-China trade war, exports from India seem to be falling, giving way to countries like Vietnam and Thailand.
“The challenges of a high GST (18%) on cut and polished diamonds, high import duty on gold still remain and we are unable to utilise the opportunity. Despite several representations from GJEPC on our industry, specific challenges remain,” said GJEPC vice-chairman Colin Shah. The US is the leading importer, which accounts for nearly 30% of total exports of $10 billion.
Courtesy - TOI
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