Nov 17, 2014

US Assistant Secretary Meets G&J Association Heads: GSP Discussions at the Fore

Charles Rivkin, Assistant Secretary, Bureau of Economic & Business Affairs, USA, along with a high level delegation, held discussions with senior representatives of The Gem & Jewellery Export Promotion Council, Bharat Diamond Bourse and the Seepz Gem & Jewellery Manufacturers Association on Saturday, November 15th  at the Bharat Diamond Bourse to discuss key concerns on Indo-US trade in the gems and jewellery sector.

One of the main points raised by the Indian representatives was that of withdrawal of GSP benefits to India by the US, a few years back.

“Currently, Import of jewellery from India attracts duty between 5.5% - 5.8%,” GJEPC Chairman Vipul Shah pointed out, “Jewellery exports have witnessed a sharp decline from US$ 2.3bn in 2007 to US$ 1.5bn in 2013 due to the withdrawal of GSP benefits extended to India by the USA.”

In a detailed presentation, the Indian delegation pointed out that if the GSP benefits were restored, it would have a positive impact on a vast population in India through job generation and would also positively impact entrepreneurs in the micro and small sectors.

Moreover, the presentation stated that re-instating of GSP benefits to India “Will support the US retailer business with the increased availability of quality jewellery at reasonable prices”. It assured the US delegation that this would have a minimal or no impact on US manufacturing.  Explaining this, Colin Shah, Convener, Jewellery Panel Sub-Committee of GJEPC said: “India is not a competitor to USA’s domestic manufacturers as the product category which India supplies to the US is focussed on jewellery using small-sized diamonds, whereas the jewellery manufacturers in the US are mainly creating jewellery with larger diamonds.”  

The presentation also pointed out that “In addition to US retailers, India’s GSP issue has also drawn support from MJSA and Jewelers of America Inc.”

Rivkin was impressed by the BDB which he had toured and said: “I am startled by the sheer magnitude of the bourse and the employment generated by the industry to the tune of 3.5 million. India should emphasise Transparent Supply Chain and Responsible Sourcing as these are the two key concerns of the US Government. The US GSP annual review is on table of the US Government and will be announced soon in near future.”

The Indian delegation highlighted the emphasis on ethical and fair business practices being followed by the Indian industry and outlined the measures being taken. “GJEPC ensures all diamond manufacturers observe strict KPCS compliance while sourcing the rough,” stressed Vipul Shah.

Other measures include proactive and aggressive steps to prevent the undisclosed sale of synthetic diamonds as natural diamonds undertaken by the Natural Diamond Monitoring Committee established under the aegis of GJEPC and BDB; regular  dialogues with the members, governments, both national and international, financial institutions and associations around the world to spread the message of 360 degree compliance and towards achieving excellence in terms of quality, upgradation of technology and following of ethical business practices

Anoop Mehta, President BDB, informed the US team that “BDB along with the Council is in the process of implementation of a project called “MY KYC” to achieve compliance in terms of anti-money laundering and terrorist financing”.

USA is one of the leading export destinations for gems & jewellery and India exported total gems & jewellery worth US$ 5.9 billion in the period January – September 2014 with jewellery exports valued at roughly US$ 1 billion and diamonds of about US$ 4.5 billion.

While India’s total gem & jewellery exports stood at US$ 40 billion in FY 2013-14, India-US trade in gem & jewellery was at US$ 8.00 billion in the same period; with diamonds exported worth US$ 6. 1 billion and jewellery exports valued at US$ 1.36 billion for that financial year.

In addition to the GSP restoration, the trade members emphasised that the US retailers should incentivise the Indian industry for being members of Responsible Jewellery Council to achieve highest level of compliance to meet the expectations & demands of consumers in the world, especially the USA. They also insisted on fair play in calling for standards in terms of Indian manufacturers vis-a-vis jewellery manufacturers from other countries.

The Indian jewellery industry said that it is proactively engaged with OECD to comply with responsible sourcing of conflict free gold for manufacturing of jewellery to comply with Dodd & Frank Act regulations.

Photo cap: Anoop Mehta, President BDB (l) and Vipul Shah, Chairman GJEPC (r) welcoming Charles Rivkin Assistant Secretary, Bureau of Economic & Business Affairs, USA (centre)