Mr. Piyush Goyal, Hon’ble Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, has been in the news for his winning export-centric moves.
Mr. Piyush Goyal is a man on a mission! Last September, he surprised the gem and jewellery industry by spending several hours with manufacturers and exporters to grasp the ground realities and challenges that our sector faces.
Having been a renowned Investment Banker and top-ranking Chartered Accountant, Mr. Goyal has a deeper understanding of the pain points and concerns of the export sector than most. He has been lending an empathetic ear to exporters in pursuit of his mission to grow exports.
Taking swift decisions has always been Mr. Goyal’s forte. His personal interest and involvement with our industry has invigorated us to step up our efforts as well.
On 17th September, the Minister visited the Surat Diamond Bourse along with Ms. Darshana Jardosh, Hon’ble Minister of Textiles & Railways, Govt. of India. They were briefed by the GJEPC Regional Office-bearers about trade-related issues such as Accumulation of Input Tax Credit due to inverted duty structure; 2% Equalisation Levy (EL) imposed on purchase of rough diamonds using online platforms; and the demand to re-introduce para on Diamond Imprest License in the Foreign Trade Policy.
Mr. Goyal immediately spoke to concerned department to review the GJEPC’s proposal regarding the Imprest License and called for an early resolution. As for the proposals on ITC accumulation and 2% EL, he assured to take up the matter with the respective departments.
IIJS Bengaluru Visit
The next day, Mr. Goyal he flew to Bengaluru to visit the 37th edition of India International Jewellery Show and spent nearly three hours walking around the five expo halls spread across 77,200 sq m to exhibitors, making it the longest amount of time that any Commerce Minister of India has spent at IIJS!
I was happy to note that he took interest in the inventory presented by exhibitors and stopped by at several booths to interact with them. Later an IIJS Interactive Session attended by more than 100 manufacturers, retailers, exporters, trade associations, international buyers, Mr. Goyal kept the interaction informal while discussing trade-related policies. He remarked that “The creation of a ‘Credit Guarantee Fund’ could help manufacturers overcome financing issues and facilitate smoother trade.” He encouraged manufacturers to set up lab-grown diamond (LGD) machines rather than depending on the Production-Linked Incentives Scheme. “LGDs have the potential to catch the fancy of the middle class,” he noted.
Mr. Goyal hailed the ₹11,000-crore Jewellery Park project that will be set up in Navi Mumbai but requested the industry to consider offering affordable housing on rental basis for workers close to their workplace under the Affordable Rental Housing Complexes (ARHCs), a sub-scheme under the Pradhan Mantri Awas Yojana – Urban. As for the FTAs, he informed that there is every possibility to sign up one with Australia once the international covid restrictions are lifted. He signed off by reiterating the fact that the industry must become more self-reliant and self-regulatory.
Less than a week later, on 23rd September, Mr. Goyal once again became the first ever Commerce Minister to visit SEEPZ in Mumbai, where he met with officials from GJEPC and SEEPZ along with jewellery exporters.
During his SEEPZ visit, Mr. Goyal announced a ₹200 crore grant for upgrading the SEEPZ infrastructure and an additional ₹70 crore for developing an on-site Mega Common Facility Centre (CFC). He urged the exporters to make SEEPZ an iconic landmark and a showcase for the Indian gems and jewellery industry. His vision is to make the 110-acre Special Economic Zone (SEZ) in Mumbai the global standard for manufacturing jewellery and a dynamic powerhouse of economic activity.
He believes that SEEPZ needs a complete makeover and a revamp of the entire property and emphasised: “Let’s aim for transformational change and not incremental change and bring back the vibrancy into SEEPZ like the earlier years.” He added that we should be looking at $30 billion in exports from SEEPZ.
Mr. Goyal noted that he would speak to local authorities in the financial capital to see if the “Global Floor Space Index (FSI)” can be availed for the properties, so that bigger spaces can be constructed on the same land.
Citing the low rents paid by the owners of the 150 units, Mr. Goyal said a public-private partnership scheme can be arranged where the government assures no hike in property rentals for a longer period of 8-10 years if the unit owner revamps the place.
Meanwhile, Mr. Goyal said there are large tracts of land in SEZs lying vacant across the country, and the government is mulling possibilities to aid their promoters to exit the status and deploy the land for other uses, Goyal said.
The Minister elaborated, “India Trade Promotion Organisation (ITPO) can consider having a 30,000-40,000 sq. ft. exhibition complex here, where we can have foreigners coming, so that we don’t have to move goods out of SEEPZ. We can create a permanent exhibition facility here.
“We are trying to ease the system of SEZs going forward and make it easier for people to exit from the SEZ status. We are also doing partial derecognition of existing SEZs so that areas which have no more demand can be de-notified,” he informed.
The proposed training centre will provide skilled manpower for the industry, thereby supporting the Government’s “Skill India” initiative. The new facilities will also strengthen the domestic manufacturing capabilities in support of ‘Make in India’ and ‘Atmanirbhar Bharat’. And the Mega CFC will improve access to high-end and advanced machinery and technology such as 3D Metal Printing, fully automated Gold / Platinum casting machines, Laser engraving, Lab-grown Diamond Detection Technology, etc. The infrastructure support will help SEEPZ to meet the globally benchmarked standards.
I think the much-needed boost provided by Mr. Goyal will propel the industry towards achieving the target of $43.75 billion in exports this year. It will also generate the momentum required to reach our goal of $69 billion in exports within the next few years.
Banking Finance Meet
At the Vanijya Saptah (Trade & Commerce Week) event in Mumbai organised by the Ministry of Commerce as part of the Azadi Ka Amrit Mahotsav Celebrations, Mr. Goyal met bankers and exporters on export financing issues and exhorted them to aim high and think long-term. He suggested that banks need to be liberal regarding exchange rates. “Banks should, in fact, give benefit rather than penalise MSMEs,” he added. He also urged the Indian Bankers’ Association to take a more liberal approach towards credit rating, penal interest, and penal insurance charge, in view of difficulties faced due to Covid-19.
As part of the Government’s announcement of the “Atmanirbhar” vision and achieving the target of $400 billion in merchandise exports, Mr. B.V.R. Subrahmanyam, Commerce Secretary, had an exclusive session with gem and jewellery exporters in early September in Mumbai. A range of points were covered, including GST, the Reserve Bank of India norms of the export community as well as Customs-related policies and issues. The Commerce Secretary assured full support to the industry to increase exports.
I believe that the latest initiatives announced by the Commerce Minister will usher in the Golden Age for the Indian gem and jewellery industry.