The imposition of the proposed 25 percent import duty on 17 Indian jewellery items for the time being consists of exports to the US to the tune of $57 million. Though this amount looks less, there is every chance that this can get extended to other products from the sector too. American jewellery companies also bank on Indian companies to fund their business by giving long credit and memo facilities, which will have major repercussions.

Indian companies have established an estimated 500 offices around the US that provide thousands of high-paying white-collar jobs to locals. The imposition of duty could affect all these jobs as the Indo-US jewellery business would become unviable. Duties would also immensely impact the labour-intensive sector with loss of jobs and livelihoods and a shift of business to countries such as China and Mexico. However, there is a respite as the same has been extended for six months post several representations made by GJEPC along with trade bodies and the government of India.

The vaccination drive is in full swing in India and things will get back to normalcy very soon. There will be pent-up demand for gem and jewellery post-Covid due to festivities and marriages. G & J business owners are expecting gold imports to pick up from the second half.

The government has accepted and incorporated all the recommendations of the GJEPC in the amended Gold Monetisation Scheme (GMS). 

The decision to include jewellers as Collection and Purity Testing Centres and the introduction of standard operation procedures for retailers under GMS is well appreciated. While there are no more amendments from the industry side, G & J business owners are hopeful that the Indian Bank Association will ensure seamless operation of GMS with the help of jewellers.

India imports around 700 tonnes of gold every year and is the second-largest consumer of gold after China. With the revamped gold monetisation scheme, there will be local gold in the system and dependency on gold imports will come down significantly. G & J business owners anticipate gold imports in the next three years to gradually reduce by 30 percent, which will help the country with the current account deficit.

India’s key export markets such as the US, Hong Kong and the United Arab Emirates have opened up for economic activities and are witnessing considerable demand for diamonds, gemstones and plain and studded jewellery. Demand for cut and polished diamonds along with diamond jewellery has witnessed significant growth of over 9 percent in April-May 2021, compared to the same period in 2019, the year before the pandemic.

G& J sector is hopeful of government support in sustaining this as the export markets are already opened up and can witness pent-up demand across the US and the Middle East. With limited restrictions, trade and business are expected to be operational to fulfil the demands of the international markets and grow the economy.