Since the publication of allegations that Nirav Modi and his
uncle Mehul Choksi, managing director of Gitanjali Gems, were involved in
defrauding Punjab National Bank of $2 billion, keeping morale high has become a
priority for the Gem & Jewellery Export Promotion Council (GJEPC). Together
with industry experts — both national and international — the council has committed
itself to boosting the industry through various shows, initiatives and
government negotiations.
“We expect gem and jewelry exports to grow by $60 billion by
2022 and employment [in the industry] to increase to 8 million from the current
5 million,” said chairman Pramod Agarwal.
Major initiatives and activities
Talks with the government will revolve around policy reforms
and infrastructure support for each sector within the industry. Agarwal
explained that the GJEPC would advance the following proposals:
For the diamond sector:
- Introduction of a realistic presumptive-tax rate —
calculated based on average income rather than actual income — for the
polished-diamond industry, to encourage foreign companies to move capital to
India.
- Zero taxation
for foreign mining companies operating at the India Diamond Trading Centre
(IDTC) in Mumbai, the nation’s only Special Notified Zone (SNZ).
- Introduction
of a “job work” policy for the diamond and colored-stone sector. This would
allow international companies to send rough gems for cutting and polishing in
India, as long as they are reexported immediately.
- Sourcing of
rough diamonds: Implementing an industry-friendly government policy to restart
diamond and colored-gemstone mining in India, especially for the abandoned
Bunder project in Madhya Pradesh.
For the gold sector:
- Implementation of a comprehensive gold policy to
make imports of precious metals more cost-effective.
- To create a
government-accredited regulatory body comparable to the London Bullion Market
Association.
- Opening jewelry parks in multiple cities and towns
to encourage local artisan jewelry. This would allow workers and factories in
local jewelry markets to move to central locations, thus developing the trade.
- Setting up
Common Facility Centres (CFCs)—a government initiative to provide resources
for micro and small enterprises — at all major gem and jewelry hubs in India.
- Inclusion of precious-metal jewelry (gold and
silver) in the list of items covered by the free-trade agreement (FTA) or the
Chinese Closer Economic Partnership Arrangement (CEPA), which would apply to
trade with any country that has levies on par with the jewelry import duty in
India.
Skill development
To counter competition from China, the council has been
organizing a host of seminars and workshops on different topics — from cutting
and polishing to understanding taxation.
“In terms of skill management and
development, the council has set up gem and jewelry institutes across India,”
Agarwal shared. “Apart from the Indian Institute of Gems and Jewellery (IIGJ)
in Mumbai, Delhi and Jaipur, the council has recently inaugurated IIGJ Varanasi
and has plans to set one up in Udupi, Karnataka, very soon.”
Agarwal further mentioned setting up CFCs in
identified gem and jewelry clusters across India. “We have received grants to
set up 13 CFCs [from] the government. CFCs in India would improve quality
production of small and medium players and karigars [artisans], who are the
backbone of the industry,” he elaborated.
Article from the Rapaport Magazine - April 2018. To subscribe click here.