Mumbai: Commodities like gold and silver should be off the Regional Comprehensive Economic Partnership (RCEP) discussion table, stated a recommendation submitted by Gem and Jewellery Export Promotion Council (GJEPC) to the commerce ministry. Inclusion of these two commodities is expected to hurt the domestic market which will lead to job losses.
At a time, when the BJP-led government is trying to create jobs such a wrong move can disrupt the metal market which is already suffering from the existing government policies.
In a document accessed by The Free Press Journal, it is stated, “All gold/silver commodities including rough /semi-manufactured/ jewellery/articles/coins are strongly recommended to be under ‘exclusion’ category.”
If the government decides to exclude gold and silver in its raw form from the RCEP; but keeps finished products in the deal, it will create “inverted duty structure” for the sector, added a source. Inverted duty structure means import duty on finished gold and silver products is low compared to the import duty on raw materials of this precious metal—used for finished products.
“This would result in surged imports of finished gold and silver jewellery, articles etc.; and would adversely impact production, exports, job loss and duty loss of the government,” the paper by GJEPC stated. The body has suggested platinum jewellery should also be excluded too.
Since the gems and jewellery sector employs close to 5 million people, it could also lead to huge job losses, something that the country can ill afford.
The council has gone ahead and had requested the government to open up gold powder segment only to Australia and not for Indonesia. “This is mainly because Australia has a domestic market and Indian jewellery industry can find an export market there.
But in case of Indonesia, they do not have domestic market and they will route the finished product to India.” So again, India will end up losing more than gaining.
The council has advised the government to exclude imitation jewellery too, except for some countries, but with stringent value addition norms of 100%.
As per the August data, cut and polished diamond exports have dropped by 19 per cent to $8.34 billion. Gold jewellery exports are down by 4 per cent to $5.02 billion.
While other segments have taken a hit, silver jewellery exports have soared by 83% to $437 million. “Any further policy changes (like RCEP), can drag the industry further and encourage the grey market,” revealed another source familiar with the subject.