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Gems and jewellery neglected

MUMBAI: The gems and jewellery sector feels that it has been neglected in the Union budget 2009-10. The sector has been a major exporter for several years and earns about 12 per cent of the country’s foreign exchange reserves.

Expectations were high that the budget would alleviate some of the issues facing the industry. “I do not know why but there was nothing for the industry,” said Gems and Jewellery Export Promotion Council (GJEPC) Chairman Vasant Mehta.

The industry now benefits from an interest rate cut of two per cent, which has been extended till March 2010. The sector had demanded an additional two per cent interest subvention. “We wanted several issues addressed like interest subvention for jewellery exporters to bring down the costs and issues related to flow of dollar financing for the industry. But considering that there has been such a downturn in the export markets mainly the U.S. and Europe and the severe impact it has had on gems and jewellery exporters, we were at least expecting some sort of scheme for the over two lakh workers in the industry who have been rendered jobless.”

The GJEPC Chairman’s sentiment was echoed by Mehul Choksi, Chairman, Gitanjali Jewels, a leading jewellery exporter. “ It is very disappointing, there is nothing for us. While the removal of excise on branded jewellery is a welcome step, the hiking of duty on gold is a negative sign for jewellery exporters.”

The budget doubled the import duty on gold bars to Rs. 200 per 10 grams while for other forms of gold (excluding jewellery), it has been doubled to Rs. 500 per 10 grams. Dharmesh Sodah, Director, World Gold Council – India, welcome the exemption of excise duty on branded jewellery.

“The hike in import duty on gold works out to 1.4 per cent at Monday’s price against 0.7 per cent pre-budget. It may not seem so significant, but then gold prices have been moving up.”

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