Interview/ Vipul Shah, chairman, Gem and Jewellery Export Promotion Council
India is the fourth largest exporter of gold jewellery, the second largest of silver jewellery, and the world leader in exporting cut and polished diamonds. India is also emerging as a leading manufacturer of lab-grown diamonds.
Vipul Shah, chairman, Gem and Jewellery Export Promotion Council, says India needs to strictly enforce hallmarking regulations to curb the circulation of impure gold and consolidate its position as “jeweller to the world”.
Excerpts from an interview:
Q/ Are regulatory frameworks and infrastructure in India sufficient to meet long-term demand?
A/ With annual exports nearing $40 billion, India has established itself as a prominent participant in the global gems and jewellery market. With a skilled workforce of five million individuals and a robust infrastructure, India is in a favourable position to leverage its strengths.
The Gems and Jewellery Export Promotion Council (GJEPC) is spearheading several initiatives aimed at augmenting the industry’s infrastructure, including setting up a jewellery park in Mumbai and a gem bourse in Jaipur. These projects are poised to revolutionise the industry and generate two lakh jobs.
In terms of regulatory framework, we want the government to reduce the import duty on gold, silver and platinum to 4 per cent. [This would ensure] a healthy and transparent industry and decrease the blockage of working capital of exporters.
Q/ Can a reduction in customs duty curb gold smuggling?
A/ Reduction in gold import duty has been a long-standing demand of the gold industry. [News] reports indicate that the high import duty on gold has contributed to an increase in unlawful activities. A reduction would address this issue by promoting the official inflow of the precious metal, thereby strengthening value addition and increasing demand.
Q/ What are the other key reforms that can help consumers access pure gold?
A/ Mandatory hallmarking has brought trust and transparency to the industry. It has ensured that gold jewellery and artefacts meet specific purity standards. Promoting the use of digital platforms can enhance transparency and traceability. Platforms like Digital Gold allow consumers to buy gold in smaller denominations and hold it in electronic form.
Q/ How is the government helping gem and jewellery exporters?
A/ The gem and jewellery export sector contributes 15 per cent of Indian merchandise exports. The India-UAE Comprehensive Economic Partnership Agreement and the India-Australia Economic Cooperation and Trade Agreement have greatly benefited the sector.
The government has also recognised the potential of lab-grown diamonds (LGD). It has provided research grants to IITs for five years and reduced customs duty on LGD seeds to zero. These measures aim to establish India as a global leader in end-to-end manufacturing of lab-grown diamonds and jewellery.
Q/ How does Make in India and the government’s digitisation efforts impact the sector?
A/ Make in India has focused on promoting indigenous manufacturing capabilities. This has led to increased investments in modern machinery, technology and skill development.
The digitisation wave has been embraced by the industry, effectively utilising e-commerce platforms that have streamlined trade and enhanced market accessibility for Indian jewellery exporters. Through online platforms, a broader global audience has been reached, empowering small and medium enterprises to exhibit and vend their offerings on a worldwide scale. This surge in online presence has also unlocked a multitude of export prospects and facilitated revenue expansion. The gem and jewellery industry will continue to leverage the Make in India initiative and digital advancements to further strengthen the sector.