All India Gems and Jewellery Trade Federation (GJF), a national body to promote gems and jewellery trade, expects to become a ‘Council’ with a senior government official heading the organisation.
“The Union Commerce Ministry has forwarded a recommendation to the Finance Ministry for converting the federation into an apex trade body with government representatives, which will give the trade a shot in the arm,” according to N Ananthapadmanabhan, Regional Chairman of GJF, and Managing Director of jewellery retail chain NAC Jewellers. He said once the Federation becomes a Council, the trade body will have a reasonable influence in policy-making. The Indian jewellery business accounts for 6 to 7 per cent of the country’s GDP, and 14 per cent of its over all export.
“We have put that on top of our budget wish list, as 10 per cent duty is taking its toll on the domestic trade, besides indirectly encouraging gold smuggling into the country,” he said.
The Federation of Indian Chambers of Commerce and Industry (FICCI) says, in a press release, the key demands of the industry include reinstatement of Gold Metal Loan facility for long-term thereby bringing the interest costs to the level that were prevalent prior to 2013; customs duty to be reduced to less than 2 per cent level to completely eliminate smuggling; to set-up world class ‘shared’ jewellery manufacturing hubs on PPP basis with the best equipment being made available to the karigars & MSME units on rental basis
“The biggest challenge the industry faces is the withdrawal of the Gold Metal Loan facility (GML), in May 2013”, says Mehul Choksi, Chairman of the FICCI GJC Committee in the release. “This move has virtually crippled the industry, leading to huge losses and making Indian exports un-competitive in the global market. This can be easily resolved if the GML facility is reinstated wherein bullion can be borrowed at highly competitive interest rates lower than the US$ denominated rates, in the international markets for tenor of one year and above”, he added.
Priority sector Among its other suggestions were US dollar denominated loans for exports by the gems and jewellery sector considered as ‘priority sector’ lending; and buyer credit period to be enhanced from 90 to 365 days to allow the diamond sector to increase its export of polished diamonds and get a better price realisation.