In a move that could provide extended relief to jewellery exporters, the Indian Government is considering further deferment of its decision to reduce permissible wastage in export of gold, silver and platinum items beyond July 31 as it is “diligently” examining a deluge of industry inputs and pleas on the need to maintain the higher limits, sources said.
“The DGFT may need another month to diligently go through all the data provided by various industry groups trying to prove that the wastage in their particular sectors is higher than the reduced limits that were notified in May this year (but were put on hold). Details have been submitted on the whole process including valuation and cost. The norms committee is looking at it,” an official tracking the matter told businessline.
On May 27, the DGFT amended the export policy (wastage permissible and Standard Input Output Norms) reducing the wastage limit on gold and platinum jewellery to 0.5 per cent from 2.5 per cent and on silver jewellery to 0.75 per cent from 3.2 per cent. For medallions and coins (excluding coins of nature of legal tender), the permissible percentage was lowered to 0.1 per cent from 0.2 per cent.
Industry protests
However, the policy was subsequently put on hold till July 31 following industry protests. The DGFT then called for inputs from the industry to support its argument against reduction of permissible wastage.
The Standard Input Output Norm (SION) fixed by the DGFT specifies the required amount of inputs needed to produce a unit of output for exporting and is important as various benefits availed by exporters, including duty-free import of inputs, are tied to these.
Following the May 27 notification, the Gems & Jewellery Export Promotion Council (GJEPC) had met DGFT officials and expressed its concerns over the possibility of the revised norms having a disproportionate impact on the small and medium-sized enterprises (MSMEs), which represent 85 per cent of all exporters.
After the DGFT put the notification on hold till July 31 seeking industry inputs on it, the GJEPC said it wouldl conduct a detailed study on wastage norms on different categories of jewellery including plain, studded, machine-made and hand-made.
In 2023-24, exports of gold and other precious metal jewellery was valued at $13.31 billion which was 7.74 per cent higher than exports in the previous year.