GJF Welcomes Withdrawal of 80:20 Rule

gjf-logoMumbai: All India Gems and Jewellery Federation (GJF), the national nodal and the largest single trade body in India for the promotion and growth of trade in gems and jewellery across India, has welcomed the Government’s move to abolish the 80:20 Rule for gold imports and expressed its gratitude to Prime Minister Shri Narendra Modi, Union Finance Minister Shri Arun Jaitley, Smt. Nirmala Sitharaman (Union Minister of State for Commerce & Industry) and all bureaucrats from the relevant ministries and Reserve Bank of India. The move to abolish 80:20 Rule comes close on the heels of GJF’s letter to Prime Minister Shri Modi last week and persistent efforts with key policy makers for more than 12 months. It also comes as a relief to all those people who are buying gold & jewellery during the wedding season.

GJF has proposed unlocking of idle gold in the country to the tune of 1,000-1,500 tonnes within 3 years through Rashtriya Swarn Nivesh to reduce CAD further. GJF also sought the formation of a nodal Ministry to represent it. Considering that the Government (through RBI notification dated November 28, 2014) has withdrawn the provisions contained in A.P.(DIR Series) Circular No.25 dated August 14, 2013 and the subsequent clarifications issued from time to time, resting with the A.P. (DIR Series) Circular No.133 dated May 21, 2014, GJF has also sought clarity on whether circulars prior to August 14, 2013, including those on restrictions on import on a consignment basis and gold loan (issued in May 2013) still prevail – if they are, then the latest circular is more restrictive instead of being beneficial to the trade.

Mr. Haresh Soni, Chairman, GJF, said, “We sincerely thank the Prime Minister, Union Ministers and bureaucrats for giving a fresh lease of life to the gems and jewellery sector, which has been gasping for breath. On behalf of all member Associations across India, we reiterate our support to the Government for its various initiatives to remove trade distortions while stimulating growth in the economy and overall development. GJF also recognizes its responsibility of self-regulation.” He added, “We urge the Government to initiate the process of creating a comprehensive gold policy and we shall support it wholeheartedly. We are hopeful that gold supply will be better now and lakhs of craftsmen will be able to get jobwork. However, we urge the Government to curb smuggling from neighbouring countries by reducing gold import duties. Considering that the gems & jewellery sector has been going through tough times, GJF also sought the formation of a nodal Ministry to represent its sad plight and sorry state.” GJF has proposed a national debate on this matter because gold is part and parcel of the common man’s life since thousands of years.

Mr. Manish Jain, Vice Chairman, GJF, said, “GJF urges the Government to bring down the duty on gold from 10% to 5% first and then 2% eventually as it will make smuggling unprofitable. The hike of import duty on gold has built a parallel economy, leading to wide scale gold smuggling, which has increased manifold to beyond 200 tonnes. Bringing down duty would eliminate smuggling and also deployment of any black money for this process.”

Mr. Bachhraj Bamalwa, Director, GJF, added, “We also urge the Government to include gems & jewellery sector in ‘Make in India’ initiative and encourage India’s glorious legacy of handcrafted jewellery making. Unlike many other mega imports of other products, the gems & jewellery sector creates value addition, provides employment and encourages indigenous manufacturing. Jewellers are mostly self-employed entrepreneurs and already engaged in promoting the Prime Minister’s concept of ‘Make in India’.” He added. The country’s problems are ours too. We are there to help the Government by joining hands with it as and when needed. We shall make sure that the Country’s CAD situation doesn’t deteriorate due to unnecessary gold imports.”

“Keeping in mind, Hon. Prime Minister’s vision of promoting “Make In India” brand we have to protect our manufacture industry. We propose that the difference between import duty of raw material (gold & silver) and finished jewellery (gold & silver) to be maintained at minimum 10% (for gold) and 15% (for silver). When the manufacturing of jewellery in India will be costlier after paying the import duty and premium, than there will be a tendency to import finished jewellery directly from abroad. This deprives lakhs of livelihood in the manufacturing industry,” he added.

Mr. Ashok Minawala, Director, GJF, said, “GJF sees the possibility of unlocking idle gold in India through jewellers and bank. The Rashtriya Swarn Scheme can be a pioneering initiative to help the Indian Government’s national agenda of reducing import of gold and discovering alternative sources of gold. Eligible jewellers will work as nominated agents of the Bank and will help collect unused and idle gold from households and temple trusts. In three years, we can help mobilize 1,000 to 1,500 tonnes of unused/idle gold and make India free from importing gold for domestic consumption.”