As part of its pre-Union Budget recommendations, All India Gems and Jewellery Trade 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 urged the Union Finance Minister to bring down the duty on gold from 10% to 2% to encourage 'Make in India' initiative in the gems & jewellery sector. At present, the current account deficit is under control due to reduction in global gold prices (40% down) from USD 1,900 to USD 1,200 today. Fortunately, crude prices (which account for the highest bill for imports) have reduced 60% in last 6 months.
According to the GJF, increasing import duty on gold has neither helped the Government nor the trade â€“ very few have benefitted and smuggling increased. Referring to these dynamically changing macro-economic indicators, GJF has reiterated its demand for the Government to formulate a comprehensive gold policy for India and make India a global jewellery hub.
GJF has categorically asked the Government to exclude jewellery from all bilateral or multi-lateral free trade agreements (FTAs). Stating that the Government should not encourage jewellery imports at cheaper rates, GJF referred to the earlier FTA with Thailand - which was a failure as it discouraged indigenous jewellery manufacturing.
Mr. Haresh Soni, Chairman, GJF, said, ""Keeping in mind, Hon. Prime Minister's vision of promoting 'Make In India' brand we have to protect & nurture our indigenous industry. Both oil and gold prices globally have fallen substantially now vis-Ã -vis last few years. 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). Jewellery manufacturing cluster should be revamped by including common facility center and skill upgradation. And we also urge the Government to create a comprehensive gold mining policy for domestic exploration and for cluster development for 'Make in India' fashion jewellery. This will also encourage NRIs to buy jewellery from India."
Mr. Manish Jain, Vice Chairman, GJF, said, "To provide incentive for the organised manufacturing facility, Government must reintroduce metal gold loans (MGL) and innovative finance options for sector. If we are not competitive on the global front, we won't be able to become a global hub and therefore MGL rate of interest should be at par with international rate (3.5 to 6% in India vis-a-vis 1.5% in international markets). We seek removal of excise duty on fashion jewellery and also abolish excise duty on precious metals as Government is not earning any revenue on it. As India is a vast country, the Government must facilitate more friendlier and accessible rules for transportation from manufacturing hubs to airports/ ports. Government has to offer incentives for importing technology as many indigenous processes are still manual."
GJF has urged the Government to monetize existing investment and reduce import burden through recycling the large gold reserves held with temple trusts, banks, NBFCs and retail customers. It has also sought widening of the availability of gold deposit schemes through banks making them more attractive to people. It hopes that the Government will liberalize regulations affecting value chain through reduction of import duty, increased finance options and ensuring consumer protection through standardization. It has asked for a multipronged approach to improve industry opaqueness through better industry and consumer interface, enforce hallmarking standards, diligence in sharing of information or listing of companies, greater transparency and elimination of unofficial supply of gold.
GJF has urged the Government to develop infrastructure to improve skill sets through upgradation 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) 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.