Mumbai: The global gem and jewellery export market is valued at $629.06 billion of which India’s share is 6.2% or $31.45 billion. Of this, every year almost a quarter of India’s gem and jewellery exports have been generated through Special Economic Zones (SEZs).
In a recent video meeting with the Department of Commerce, India’s Gem and Jewellery Export Promotion Council (GJEPC) outlined a few suggestions that would drive Indian exports from SEZs on an upward growth trajectory towards its stated export target of $70 billion.
Currently ranked at number 5 among the world’s leading gem and jewellery exporting countries, India has a vast potential to boost exports from the SEZs if certain policy measures are implemented.
Mr. Colin Shah, Chairman, GJEPC, noted, “SEZs have always played a critical role for our sector as 30% of exports are generated from these special zones. However, this figure could be larger if, given the current pandemic, the government could tweak certain policies — most importantly, the thrust on e-commerce as the world is moving towards the online mode of business.”
E-commerce has a tremendous potential for giving a fillip to jewellery exports. However, due to certain procedural hurdles like logistics and paperwork, Indian exporters have not been able to tap this avenue to its maximum capacity.
Shah explained, “E-commerce out of India is not easy. We can manufacture quickly to meet consumer demand across the world, but logistics and paperwork are not economical to ship single goods. As a result, most of this business has shifted to New York, Dubai or Hong Kong from where parcels are shipped to the ultimate customer.
“The Hong Kong-to-New York freight is free, which helps companies to grow. They have an established ecosystem of logistics and paperwork for goods below $800, with no duty. This is the future and e-commerce is the call of the hour. If India doesn’t step up, it will hurt our exports because going forward a large chunk of business will be digital.”
GJEPC therefore urged for an amendment in Courier Import & Export Regulations 2010 by CBIC to permit export and import of precious and semi-precious jewellery valued up to $800 on which advance remittance could be received. Shah noted that these amendments would benefit the entire country, as part of a larger e-commerce policy.
Regarding allowance of job work to SEZ units for DTA, Shah explained that Indian exporters were busy mostly in the second half of the year as they catered to the Christmas and Holiday Season demand, which accounts for 50% of the entire year’s business. “SEZ units have built excess capacities to meet huge seasonal demand. During the lean period, the facilities are not utilised to the maximum and so GJEPC is of the view that the SEZ workers can be engaged in job work for DTA units,” Shah commented.
Among the other measures suggested by GJEPC to boost exports from SEZs were:
- Sale of unutilised inventory such as cut and polished diamonds and gemstones that were procured from the DTA unit earlier for manufacture of jewellery and are not required any longer.
- The SEZ units should be allowed to dispose off scrap (other than gold/silver/platinum) on payment of applicable duty on the actual sale price of the scrap.
- Transfer of assets by outgoing SEZ units to a new eligible entrepreneur after cancellation of their Letter of Approval (LoA).
- To allow import of precious metal directly from foreign buyers on loan basis by SEZ units.
- Valuation and payment of duty on used capital goods should be implemented as per the specific provision in Rule 49(1) of SEZ Rules 2006.