Platinum shimmers

JEWELLERY: Import duty on platinum cut from Rs 550 per 10 gm to Rs 200

The finance minister's proposal to reduce import duty on platinum from Rs 550 per 10 gm to Rs 200 should make the metal a good alternative for jewellery makers.

Industry players feel that the move will lead to an increase in the usage of platinum in jewellery, expanding the options of experimenting with various designs.

However, the metal is unlikely to rival gold in its popularity as an investment option.

While the popularity of platinum has been growing over the last three years, finding use in 40-50 per cent of the diamond jewellery produced, the metal does not have the same allure that gold has for investors.

"This is because investment in platinum is much more expensive than in gold. Secondly, the prices of the metal tend to be rather staid, reducing the metal's popularity with investors," said Suresh Hundia, president, the Bombay Bullion Association.

Currently, 10 gm of gold costs around Rs 6,040, whereas an equal quantity of platinum costs twice as much "" around Rs 12,000.

Hundia said the nascent level of awareness about platinum's purity standards, along with the fact that gold commands a much better resale value, tilts the scales in the yellow metal's favour.

However, the duty reduction is likely to give a fillip to platinum jewellery exports. Players said platinum is the metal of choice when it comes to jewellery in the western world, which prefers this metal over gold.

"The negligible use of platinum in India has led to a situation wherein there is less import and limited knowledge about the metal's usage in jewellery," said Sanjay Kothari, chairman of the Gems and Jewellery Export Promotion Council.

Kothari said the reduction of duty on platinum should see higher use of the metal and given India's savvyness in designing jewellery and its popularity abroad, the business will boom.