GJF Welcomes Govt’s Move to Ease Gold Import

gjf-logoMumbai: All India Gems and Jewellery Trade Federation (GJF) welcomed the Union Government’s recent initiatives to ease supply of gold as raw materials but sought industry status for the sector and National Jewellery Council status for the Federation so that it could implement key initiatives for the sector. GJF has urged the Government to create several jewellery parks with shared infrastructure to support the ‘Make in India’ initiative. It also sought skill development programmes to be aggressively extended and expanded in the country through various training institutes.

On February 18, 2015, Reserve Bank of India notified on “Guidelines on Import of Gold by Nominated Banks / Agencies” [RBI/2014-15/474 A.P. (DIR Series) Circular No.79 dated February 18, 2015] wherein nominated banks are now permitted to import gold on consignment basis. All sale of gold domestically will, however, be against upfront payments. Banks are free to grant gold metal loans. Star and Premier Trading Houses (STH/PTH) can import gold on DP basis as per entitlement without any end use restrictions. While the import of gold coins and medallions will no longer be prohibited, pending further review, the restrictions on banks in selling gold coins and medallions are not being removed.

Mr. Bacchraj Bamalwa, Director, GJF, said, “We are grateful to the Government and RBI for providing clarification regarding import of gold. The trade now has clarity on gold metal loan, which was a burning issue. Banks can now import gold on consignment basis which is a relief for the industry. The ban on import of gold coins and medallions has been lifted. It seems the worst days of the industry are over. We are eagerly waiting for the budget in which we have a great hope in reducing the import duty on gold, silver, platinum, etc.” He added, “Gold flows into the country have slowed down with only 27 tonnes imported as of February 13, 2015, as compared to 63 tonnes in January 2015 and 39 tonnes in December 2014. The gold being imported is purely for jewellery making purposes as investment demand has died. With respect to ‘Make in India’ initiatives, we urge the Government to make the country a global hub by creating many domestic jewellery manufacturing parks where shared infrastructure facilities can reduce overheads and reduce costs to final customers.”

If the gems & jewellery sector which contributes around 6% to the GDP and 14% of exports (and employs the 2nd largest number of people after the software industry) gets industry statues, then getting land for factory units in Government owned sites such as SEZs/ MIDC areas, etc. will become easier. Manufacturing base in India shall experience huge bounds. Industry status will also facilitate the provision of fiscal incentives, insurance norms and availability of credit. Availing of bank loans and extension of credit limits will become easier. The gems & jewellery sector will have easier borrowings overseas, ability to raise domestic funds through institutional lending, tax-free bonds, tax concessions, credit ratings, etc. Industrial Labour Act rules will apply; and industry status will lead to more employment generation.

GJF has been pursuing with the Government to focus its policy measures on development of the Gems and Jewellery industry and formulate a comprehensive gold policy for India and make India a global jewellery hub. The Indian Jewellery industry has huge potential not only to boost the domestic economy but also help in realizing the Prime Minister’s dream proposal ‘Make in India’ a reality by generating self-employment and improving skill sets among the growing younger population in the country.

GJF has urged the Government to develop infrastructure to improve skill sets through up=gradation and skill development by promoting and standardizing professional vocational courses, introducing fee subsidies, offering scholarship programs, reviving dying arts and crafts, more training. It has urged the Government to roll out the National Skill Certification and Monetary Reward Scheme (NSCMRS) extensively to increase productivity and attract young manpower. It has sought an increase in investment in technology to improve health and working conditions as well as labour productivity. It has asked the Government to provide adequate thrust for skill and infrastructure development through easy financing, incentives, subsidies, facilitation of land allocation, and supply of utilities.

Gem and Jewellery has been identified by the NSDC as a high growth sector to initiate skill-training programs. Most of these individuals have learnt on the job and have no any formal training. The intent is to train 4 million (40 lakh) people in the sector till 2022 as the sector is facing shortage of skilled manpower. The industry lost nearly 400,000 skilled manpower post economic recession in 2008, out of which, an estimated half returned while the remaining half migrated to other industries including textile and agriculture farming.

The All India Gems and Jewellery Trade Federation (GJF) represents over 6,00,000 players comprising manufacturers, wholesalers, retailers, distributors, laboratories, gemologists, designers and allied services to the domestic Gems & Jewellery industry. The Gems & Jewellery industry is a hand crafted and labour intensive with over 1 crore strong labour force engaged in the manufacturing of jewellery industry in the domestic sector.

The Federation’s mission is to support and promote the progress and prosperity of all the members in the gems and jewellery industry across India. It also provides regular news updated on notifications, rules and regulations declared by the Government. It promotes the trade, by participating in promotional events on a national level. It encourages the trade through the organization of consumer exhibits in India. It also counsels educational and research institutes that help in developing superior quality and high standards for effective functioning of the trade.

The gems and gold jewellery business has made significant contribution to the Indian economy and society. The sector has grown phenomenally on the national and international front in the last few years. The industry is in transition phase where family owned entrepreneurial businesses are slowly evolving and transforming into organized professional organizations. Creating a proper policy framework will pave the way for stimulating growth and encouragement.