Author: Paul Ploumis24 Mar 2014 Last updated at 01:01:29 GMT
MUMBAI (Scrap Monster) : India’s Gems and Jewelry export is likely to fall by 15 % this year, according to expert analysts at GJEPC. The estimate shows drastic a decline in gold import in India followed by the 10 % hike of gold import duty over the year. Analysts report this occurrence as the first time in last one decade and predicts that if the import duty is not eased and if Govt. continues with the stringent rules, then India’s gems and jewelry export industry is going to suffer a big fall in the coming days. The current scenario in India hit by the tightening of gold import has triggered analysts to assume that gold export may decline by 10 to 15 % this year as compared to 2013.
The polished diamond export from the time period of April 2013 to February 2014 was found to decline by 20 % when compared to same period in 2013. This indicates that the gold jewelry export has suffered a fall by 45.56 % this year. According to the data released by the Gems and Jewelry Export Promotion Council (GJEPC), which is the authorized agency and umbrella organization of India’s jewelry associations, India had exported gold jewelry worth $ 718.36 million in February 2014. This data proves only 1 % increase of export in 2014 as compared to last year, same period. Since April 2013, India had exported gold jewelry worth $ 6.35 billion in the eleven months according to GJEPC. This indicates a decline from 11.67 billion a year earlier.
The polished diamond export in 2014 was however found to increase largely by 20 %, reaching $ 18 billion when compared to the $ 15 billion of previous year (2013). The drop of gems and jewelry export according to GJEPC is the reflection of India’s 10 % gold import duty that was hiked thrice in 2013 to curb the ballooning current account deficit. In order to bring the gold import under balance, the GJEPC had requested the Govt. to lower the import duty to the original 2 %, now that the CAD has been brought under control.
The rise of gold import duty had drastically declined the import of gold to India amid its increasing demand during the festive and wedding seasons. India’s sales fell 50 % in 2014 during the festive season as compared to 2013. This had triggered gold smuggling in India due to which the Govt. had to put the in-bound passengers at all the airports of India under scanner and strict rules. According to GJPEC, if the Indian jewelry sector prospects, then it can address further employment in India by 1 million for employees from the 2.5 million of now. India’s gold demand is also found to be shifting to West Asia owing to competitive prices. According to Vipul Shah, the GJEPC Chairman, India’s export in 2014 is likely to encounter a negative sentiment due to the big fall of gold jewelry export.