Growing US economy adds to surge in India's gold jewellery exports from SEZ

In rupee term, however, India's overall gold jewellery exports jumped by a staggering 95 per cent to Rs 37.32 billion

Gold jewellery exports from special notified zones (SNZs), including special economic zones (SEZs) and export processing zones (EPZs), have almost doubled in the April-October period this year. This surge was propelled by increasing demands from the US, which accounts for about 40 per cent of the world’s gems and jewellery requirement.

Data compiled by apex industry organisation Gem and Jewellery Export Promotion Council (GJEPC) revealed that export of gold jewellery from SEZs/EPZs was worth $5.39 billion in the April-October period, a rise of 82 per cent from $2.96 billion in the corresponding period last year. In rupee terms, however, India’s gold jewellery exports jumped by a staggering 95 per cent to Rs 37.32 billion till October 2018, from Rs 19.13 billion in the same period last year.

Interestingly, gold jewellery exports from the domestic tariff area (DTA) declined by 11 per cent in dollar terms, and 3.61 per cent in rupee terms to $1.82 billion (Rs 12.67 billion) from April to October from $2.04 billion (Rs  13.15 billion) in the same period last year. “All export-centric, large gold jewellery manufacturing units exist in special economic zones, which mostly focus on developed countries, primarily the US. The US economy has seen resurgence in the past few quarters driving gold jewellery exports in the April - October period. In contrast, jewellery manufacturing units in the DTA (outside SEZ) are of small and medium sizes, and primarily focus on small-scale volume exports to regions such as the Middle East,” said Praveen Shankar Pandya, former chairman, GJEPC.

Overall gems and jewellery exports, which contribute nearly 13% of India’s GDP, recorded a marginal 3 per cent growth in dollar terms. Colin Shah, vice-chairman of GJEPC, however, said the council was yet to arrive at a conclusion on the growth in gold jewellery exports from SEZs/EPZs. Shah, however, termed the growth “unusual”.

Experts at GJEPC’s India Gold & Jewellery Summit, 2018, in New Delhi on Friday anticipated major import duty cuts in the gold in future.

“Union Finance Minister Arun Jaitley hinted at pre-Budget sops to industries in December as a pre-curser to the Union Budget 2019,” said a senior industry official.

"We expect a massive import duty cut in gold," he added.

Speaking on the occasion, the Union Commerce Minister Suresh Prabhu said, "The gem & jewellery industry can grow exponentially because of a substantially strong ecosystem around gold in the country. Of the total gold imported, only 10 per cent is exported as jewellery as we have a strong domestic demand and market. The gem and jewellery industry has to upgrade its infrastructure, and comply with the global standards to make its mark across the world."

He said GJEPC should continue forging deeper partnerships with prospective countries and tap the vast economic and employment opportunities in the business.

Meanwhile, the government is in the process of finalising the gold policy, which will help the gold jewellery industry prosper further.

Speaking at the event, commerce secretary Anup Wadhawan stressed on self-regulation of the industry and the importance of being compliant, which will help it grow further.