In anticipation of the Union Budget, the Gems and Jewelery Export Promotion Council (GJEPC) is urging the government to reduce import duty on gold and cut and polished diamonds. The move aims to enhance the global competitiveness of the region.

The gems and jewelery sector in India depends on imported raw materials such as gold, diamonds, silver and colored gemstones.

According to a news agency report PTIGJEPC is advocating reducing the import duty on precious metals to 4 percent from the current 15 percent. Additionally, it is seeking to reduce the customs duty on cut and polished diamonds to 2.5 per cent from the current 5 per cent.

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A leading industry association indicated that imposing higher import duties on cut and polished gems could lead to a decline in exports and job opportunities in the jewelery sector. This, in turn, will make survival challenging, as it will compromise the competitive edge against other countries such as China and Thailand.

It called on the government to reinstate diamond imprest licenses and reduce import duties.

This will provide a level playing field to Indian MSME diamond exporters with their larger counterparts, prevent investment of Indian diamond traders from shifting towards diamond mining sites and create more employment in factories in terms of diamond sorting and processing of semi-finished diamonds. , the exporter body added.

The Council has appealed to the government to address its long-standing request to allow the sale of rough diamonds in Special Notified Zones (SNZ) through the Safe Harbor Rule. Additionally, it recommended expanding the scope of entities authorized to operate within the SNZ. Currently, SNZ only provides access to viewing sessions organized by mining countries.

The Council advocated allowing Special Notified Zones (SNZ) to operate as Free Trade Storage Zones (FTWZ) during periods of inactivity by foreign mining companies and entities. The objective of this proposal is to ensure optimum utilization of the established facilities and maintain the financial viability of the centres.

To further expand and expand the scope of SNZ, GJEPC requested the Government to also allow globally recognized diamond broking and trading houses to operate from such SNZ.

The apex industry body said such trading houses are central to the sale of diamonds by small miners, who together comprise about 35 per cent of global mining output.

Further, to derive maximum benefits from the India-UAE CEPA, the Council also recommended introducing a system like “Rates and Tax Refunds” through EDI (Electronic Data Interchange) system similar to GST refund and rate of refund. should be made in accordance with this. Rates and taxes prevailing on the day of export (i.e. import duty and GST).

“Gems and jewelery exports are facing challenging times due to economic slowdown in major export markets, geopolitical concerns, supply and demand side constraints in the global diamond industry and unavailability of the precious metal in the country. Vipul Shah, Chairman, GJEPC, said, our pre-budget proposals will facilitate easier access to raw materials for the industry, especially MSMEs. PTI,

He said, by introducing ‘safe port rules’ for sale of rough diamonds in SNZ, India can become a trading hub like Dubai and Belgium and diamond manufacturers will not have to travel abroad to reach these trading hubs.

He said reducing the diamond imprest license to 2.5 per cent would help offset the impact of the lucrative policies adopted in many natural diamond mining countries.

“This will give India a level playing field with competing countries like China, Vietnam and Sri Lanka. We are hopeful that with the additional support from the government in terms of reduction in import duty on precious metals and MOOWAR scheme for the gems and jewelery industry, gold jewelery exports will increase significantly in these challenging times,” said Shah.