At a meeting convened by Hon’ble Union Minister of Finance & Corporate Affairs, Smt. Nirmala Sitharaman, today stakeholders from different sectors, including the gems and jewellery sector, represented by The Gem & Jewellery Export Promotion Council (GJEPC), presented their inputs in connection with the forthcoming General Budget 2020-21

The third Pre-Budget Consultations with stakeholder Groups from Industry, Trade and Services Sectors in connection with the forthcoming General Budget 2020-21 held in Delhi today was also attended by Hon’ble Minister of State for Finance and Corporate Affairs, Shri Anurag Thakur, and a number of senior government officials and industry representatives.

The Finance Ministry, in a release said, “The main areas of discussion during the aforesaid meeting included regulatory environment impacting private investment, measures for promotion of exports amidst rising protectionist tendencies, Industrial production, logistics, Media & Entertainment services & IT & IT enabled services among others.”

GJEPC was represented by Chairman Pramod Kumar Agrawal and ED Sabyasachi Ray. The main points covered in their presentation were:

• Investment: Regulatory Environment impacting private investment

• Reduction in import duty on Cut and Polished Diamonds and Gemstones from 7.5% to 2.5%
• Reduction in import duty on Precious Metals Gold and Silver from 12.5% to 4%
• Introduction of Standard Operating Procedures and Risk Management System for industry
• Amendment in income tax enabling sale of rough diamonds in Special Notified Zone in Mumbai
• Tax and Import Duty refund scheme for foreign tourist in India

• Role of the State: Delayed Payments, Contract Enforcement etc.

Key Banking Issues of Indian Gems and Jewellery Industry

• Liquidity crunch and priority sector for banks:
• Gold Card Scheme Benefits and need for insurance
• Dollarisation of Limits:
• Need for Interest Subvention to the sector:
• Interest & Bank Charges:
• Individual Policy and WTP of MSME Sector for ECGC:
• Finance to be available on GST refunds as per returns filed by the company:
• Availability of Gold:
• Remove ceiling on number of diamond dollar accounts:
• ASM (Agency for Specialised Monitoring)/ Valuations:

• Trade: Measures for promotion of exports

• E-Commerce in Gems and Jewellery Sector
• With regard to gem and jewellery sector, India should not enter in FTA/PTA/Multilateral Trade Agreement. This is because of the following reasons:

• Inverted duty structure problem may emerge & dent for domestic manufacturing sector
• Other countries would be relatively at advantageous position
• FTAs/PTAs/RTAs/CECAs do not offer any significant preferential benefits for
• G&J products
• Offer list within existing PTAs are not aligned to India’s competitiveness, hence not beneficial
• NTBs associated with FTAs makes the FTA less beneficial

• Services: steps needed to be taken to formalize informal component of services sector

Introduction of Job Work Model in Diamonds, Precious and Semi-Precious Stones Industry:

Proposed Model:

•    Proposed Job work model would help reducing nuances relating to following issues :

• Financing – cost savings
• Price volatility - not applicable as goods would be bought free of cost for processing
• Foreign currency exchange fluctuation risks – risk if any restricted only to job work charges
• Idle capacity – will have deploying unutilized facilities and employment generation
• Competitiveness – facilitate ease of doing business in India

• Proposal: Allowance of reverse job work for SEZ units in India

• Industrial Production: Policy interventions to promote Industrial especially, manufacturing growth

â–ª TUF SCHEME- for upgradation of technology

• Proposal for establishing India Jewellery Park, Mumbai:-

• Proposal for establishing a Gem Bourse at Jaipur

• Logistics

• Logistics for domestic and international trade

Pic caption: GJEPC Chairman making a presentation at the meeting with the Hon’ble Finance Minister in the presence of senior government officials