Stimulus brings cheer to Surat’s jewellery sector

March 03, 2009

Commodity Online
SURAT: After the government neglected gems and jewellery sector of Surat in the vote-on-account, it has woken up to the reality that the sector is reeling under severe problem due to the slump in the US and Europena market.

Following this, the government declared Surat as a city of export excellence, which will hel it gain some benefits under the Central scheme.

The government, under the Export Promotion Capital Goods (EPCG) scheme, reduced the export obligation proportionately in case of decline of exports by more than 5%.

Moreover, a new Central policy announced last week allowed nomination of more agencies for import of precious metals.

Agencies like Diamond India Limited, MSTC Limited, Gem & Jewellery Export Promotion Council and Star Trading House were added to the list nominated agencies for the import of precious metals.

This will be helpful in addressing issues of uneven supply of gold, thereby helping in the export of gems and jewellery.

Other sops like reduction of recognition slab for Premier Trading Houses to Rs 7,500 crore from Rs 10,000 crore turnover and removal of import restrictions on worked corals would do a bit to boost the sector.

Adding more number of entities as agencies for the supply of gold is an important move in terms of helping gems & jewellery exports. This was a demand by the gems and jewellery sector for long time as gold distribution is not uniform. This uneven supply has been hurting overall exports.

The move will not only help the exporters, but the domestic industry as well. With more number of suppliers coming in, the industry will be able to cater to the domestic market which is booming at 19% CAGR over the last four years.

Indian gold market is $27 billion, powered mainly by the wedding industry. While the consumption of fresh gold has fallen 16% over the last four year, prices have gone up by as much as 94%.

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