Gem body urges US to extend sop by a year GSP extension

An appreciating rupee and the resultant lower realisations have forced the Gems and Jewellery Exports Promotion Council (GJEPC), the representative body of more than 6,500 diamond processors in the country, to ask the US government to extend the Generalised System of Preferences (GSP) up to June 2008. The GSP is due to expire on June 30, 2007.

Instituted in 1976, the GSP was aimed at promoting economic prosperity of designated under-developed countries. Under the programme, more than 4,650 products from 144 countries were given a preferential entry into the US. Since then, the programme has been extended periodically. India was incorporated in the GSP programme though it did not conform to the norms, due to the government's efforts. India exports about 80 per cent of cut and polished diamond jewellery to the US, ranging across low and high value products.

"We are in continuous dialogue with the US government for further extension. A group of Indian representatives was sent to the US for expressing our concern to the government there. The council, in association with the government, had also made a presentation before the US ambassador in Delhi. Prima facie, they were convinced with our concerns. But, whether we get preference or not would be known only on June 30," said council chairman, Sanjay Kothari.

"If extension is granted for two years, nothing like it. The domestic sector would grow by leaps and bounds, despite the rupee appreciation. Otherwise, we have to look for new markets," said Vasant Mehta. Meanwhile, the diamond jewellery exporters are exploring new avenues for jewellery sales in the CIS and Japan, with Indian designs and finishes becoming increasingly popular there lately.

The GJEPC has set an export target of $20 billion (Rs 87200 crore) in 2007-08 (April-March). The CIS countries and East European countries offer tremendous business potential to the Indian gem and jewellery sector, with a market size to the tune of $6-7 billion (Rs 26200-30500 crore).

The council is also exploring export opportunities in Poland and the Czech Republic, where there is a major interest in plain and diamond-studded jewellery designs made in 18, 21 and 22 carat gold, platinum and silver, besides diamonds and coloured stones.

The rupee has appreciated about 8 per cent in the last one month and about 12 per cent since the same time last year.