Trade policy boost for jewellery sector

The foreign trade policy should boost the gems and jewellery sector as it has several special initiatives.

It has allowed exporters availing the schemes of gold, silver and platinum jewellery to obtain the required metals from any agency or five star export house authorised by the Reserve Bank of India.

"This is another step towards easing the procurement for jewellers and is seen as a beneficial move," said Bhargava N Vaida, a bullion consultant.

The other existing nominated agencies include the Minerals and Metals Trading Corporation (MMTC), Handicraft and Handloom Export Corporation (HHEC), the State Trading Corporation (STC) and the Project and Equipment Corporation of India Ltd (PEC).

Another significant announcement was the categorisation of exporters in the bracket of Rs 15 crore and above for three consecutive years, under star export house classification.

"This is especially welcome for the diamond industry, as it will recognise smaller players and simplify the paperwork and procedures," added Vaidya.

According to Sanjay Kothari, chairman of the Gem and Jewellery Export Promotion Council (GJEPC) the duty free re-import entitlement for rejected jewellery up to 2 per cent of free on board (FOB) value of exports, and the hike in the import limit of commercial samples of jewellery to Rs 1 lakh from Rs 60,000 would improve the flexibility in trading. However, he said the latter was a conservative move and may not lead to much change.

The industry was positive about the outcome of the announcements. The chief executive officer of Gitanjali, Mehul Choksi said, "The policy clarified the duty free entitlement at an average of 10 per cent on incremental value of export, which included diamonds. While the previous policy included this, there was some ambiguity."

Nirav Bhansali, director of Classic Diamonds, said the reduction in transaction costs and the increase in validity of the licences would help exporters.

Besides, duty free import of consumables upto two per cent F.O.B. would reduce cost of manufacture. Cutting and polishing of gems and jewellery, would also be exempted from taxes under Section 10A of the Act.