In view of the staggering exports, the Gem and Jewellery Export Promotion Council (GJEPC) has urged the government to allow units operating in the special economic zones (SEZs) to do job-work for jewellers operating in the domestic tariff area (DTA).
The council, in a representation to the department of commerce, had urged for the relaxation of the SEZ rules for a period of six months, said Pankaj Parekh, chairman, eastern region, GJEPC.
At present, SEZ units, other than gems and jewellery units, are allowed to undertake job-work for export on behalf of the DTA exporters provided the finished goods are exported directly from SEZ units. For such exports, the DTA units are entitled to a refund of duty paid on the inputs. Also, the SEZ unit, may subcontract a part of their production process through units in the DTA, with the permission of the customs authorities.
It is to be noted, most jewellers who have units in SEZs, have establishments in DTAs too. In case relaxation is allowed, they will be able to utilise the SEZ infrastructure for their units elsewhere, mainly to cater to the domestic market.
The gems and jewellery sector, which has seen a substantial fall in exports since 2007 due to the withdrawal of a 6 per cent duty concession under the Generalised System of Preferences on jewellery exports to the US, has been severely affected by the economic meltdown.
As a result, India’s share of gems and jewellery exports to the US has come down from 36 per cent in 2006 to 20 per cent in 2009.
The UAE was the largest importer of gems and jewellery from India in 2008-09, with a share of 31 per cent. This was followed by Hong Kong with a 25 per cent and the US with 20 per cent. The gems and jewellery sector accounted for 13 per cent of India’s total merchandise exports.
During April 2009, the total gems and jewellery exports of the country was $1,144 million, as against $1,740 million during the same period last fiscal, a fall of about 34 per cent.
According to Parekh, almost 70 per cent of the units operating in the Santacruz Electronics Export Processing Zone, the gems and jewellery SEZ in Mumbai, has been forced to close operations due to the fall in exports.
“About 30 per cent of the units operating in SEEPZ have retrenched over 70 per cent of their workforce. At Manikanchan SEZ in West Bengal also, several units have shut down,” he said.
Sudhir Sen of Kolkata-based B C Sen Jewellers said, in the month of May too, there has been a decline in exports, as well as domestic consumption.
