Author: Paul Ploumis23 Apr 2014 Last updated at 08:30:28 GMT

NEW DELHI (Scrap Monster): According to latest government statistics, the country’s gems and jewellery exports declined sharply during the fiscal year FY ’14. The exports during FY ’14 totaled $39.5 billion during 2013-’14, nearly 9% lower when compared with the exports of $43.34 billion during the previous fiscal.

According to Gems and Jewellery Trade Federation- the representative body that promotes growth of trade in gems and jewellery, the sharp decline in exports was primarily due to flat demand from global markets and partly on account of tight norms of gold imports by the government which led to non-availability of gold for exports.

The exports of gems and jewellery from India had been declining since October last year. This was mainly due to various regulatory curbs on gold imports. The government had raised the customs duty on gold imports from 2% to 10% in an attempt to arrest the rising Current Account Deficit (CAD). The confusion surrounding 80:20 rule also resulted in reduced gold imports by the country. All these led to severe scarcity of gold in India.

The contraction in gold imports helped the country to contain the CAD to to $31.1 billion (2.3% of GDP) during the April-December FY14 period as compared to $69.8 billion (5.2% of GDP) reported in the same period of previous fiscal year. The final CAD data for the entire fiscal is due to be announced shortly.

The exports of gems and jewellery constituted 15% of the country’s total exports during the fiscal.