As the dust of the pandemic settles, we are entering into a completely revitalised business ecosystem. India has set its sights on the tantalising prospect of becoming the world’s primary manufacturing and jewellery sourcing centre. The Government’s major thrust on increasing exports is crucial for the success of its growth strategy.
The strengthened synergies between the ministries and the industry have thrown open new prospects for growth. What’s refreshing is that the Government has held a series of open and frank consultations across the table with every stakeholder before finalising the Free Trade Agreements.
Keeping an eye on the future, the Commerce Ministry, under the exemplary leadership of Shri Piyush Goyal, is making a significant investment of ₹200 crore in sprucing up the export-focused manufacturing eco-system of SEEPZ SEZ in Mumbai, as well as ₹70 crore towards the Mega Common Facility Centre (CFC) for gems & jewellery.
The Government’s proactive engagement with the gem and jewellery sector to implement policies is helping our sector achieve the export targets. It echoes the long-standing vision and belief of Prime Minister Shri Narendra Modi—that India must emerge as the dominant global leader in gems and jewellery.
The gem & jewellery industry contributed nearly 10% of the country’s target of $400 billion exports in 2021-22 set by the Government of India. Our next target defined by the Government is to reach USD 45.7 billion for FY 2022-23. We have received a tremendous boost from the Ministry of Commerce, with the two landmark trade agreements signed by the Government of India, the Indo-UAE CEPA, the Indo-Australian ECTA. Now, the discussions at an advanced stage with Canada, the UK and EU are ushering new hope for India’s dominance in the world trade in the near future.
The outcome of the India-UAE trade deal which came into effect on 1st May this year has been remarkable. India witnessed a growth of 25% in overall merchandise exports to UAE in the first half of the financial year compared to the same period last year. The CEPA with UAE, I estimate, will likely boost our bilateral trade of bullion, gems and jewellery between India and the UAE to the tune of USD 10 billion annually.
Now, the Government has finalised yet another FTA with Australia which will further cement the already close and strategic relations between the two countries. This will significantly enhance bilateral trade in goods and services, create new employment opportunities, raise living standards, and improve the general welfare of the peoples of the two countries.
For our gem & jewellery sector, this historic India-Australia trade agreement is expected to unlock millions of dollars of additional trade due to the preferential access accorded towards India’s gem and jewellery exports to the island nation. India-Australia has a significant bilateral trade of USD 950 million for gem and jewellery commodities. Key commodities that are exported to Australia are gold jewellery plain and studded and polished diamonds. The main commodities imported from Australia are precious metals i.e. gold and silver bars.
India accounted for around 6% of Australia’s total worldwide imports of gems and jewellery of USD 7.63 billion in 2021. The ECTA will undoubtedly be a major factor in growing India’s share of the pie and be a springboard for future growth.
We expect Australia to benefit from access to areas where India is a world leader, such as diamonds. By providing preferential access for Indian gems and jewellery exports, the deal also makes it cheaper for Australian retailers to procure world-class jewellery crafted with finesse from Indian manufacturers. We expect the Agreement to boost bilateral gem and jewellery trade from USD 950 million at present to USD 1.5 billion.
The upcoming pacts with Canada and the UK will further help brighten our prospects in the two mature Western markets.
The entire supply chain of the gem and jewellery industry is transforming – from the thrust on the sunshine segment of lab-grown diamonds (LGDs) that has energised our export performance, to the emergence of hybrid retail models, application of new-age technology for innovative jewellery, and more recently, the use of Artificial Intelligence for sales and consumer data aggregation.
Under the stewardship of The Gem & Jewellery Export Promotion Council (GJEPC), the export sector has progressed leaps and bounds since 2014 when it realigned its Mission and Vision of pushing exports in newer markets, creating additional employment through technological transformation and skill development of the workers in the industry and thus increasing its contribution to the GDP. To achieve focused growth, the Council has played a key role on behalf of the entire gem and jewellery industry in the policy-making process to help the Government introduce trade-friendly and pragmatic legislation to ensure ease of doing business.
The Government, as announced in the Union Budget, unveiled the E-commerce policy for the gem & jewellery sector in June 2022. With a few tweaks, the policy will be a game-changer as Indian jewellery manufacturers will have direct one-to-one access to jewellery consumers of the entire world and achieve its objective of becoming “jeweller to the world”.
At the same time, we are excitedly awaiting the DESH Act, which is presently going through the consultation phases of the Parliamentary Committee. The Act will be critical to the SEZ ecosystem for India’s gem and jewellery manufacturing ecosystem.
The burgeoning LGDs segment has seen a meteoric rise in exports year-on-year. In a very short span of 5 years, India has grown to be the largest manufacturing hub of CVD type of lab-grown diamonds in the world accounting for 43% of the world production and having an estimated 6000 reactors that produce the LGDs. Considering the growth potential in exports and generating employment, the Government is keen to develop this sector.
GJEPC is in consultation with several states to develop the sector and boost manufacturing to support and propel the exports emerging through the new trade pacts. From Jewellery Parks to Mega Common Facility Centres and Cluster Development the sector is all set to take a leap.
The reinvigorated economic ethos will increase global confidence in India’s manufacturing capabilities and make the country a trusted partner for the entire world.