Interview with Rajiv Jain, chairman of the Gem and Jewellery Export Promotion Council.
WITH the nationwide stir by stakeholders in the jewellery industry suspended on the premise that their concerns on excise duty will be addressed once the Finance Bill is moved in Parliament, Frontline spoke to Rajiv Jain, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), on the developments so far and their implications for the industry. Excerpts from the interview:
The increase in customs duty and the extension of excise duty to unbranded jewellery appear to have upset jewellery manufacturers/merchants across the country. How do you view this move as affecting the import-dependent gem and jewellery industry in the future?
The increase in import duty has a rationale the Union Finance Minister wants to curtail the import of gold, which takes away the largest amount of foreign currency after oil imports. But imposing excise duty on jewellery of all kinds is not good for the industry.
We in the EPC of gems and jewellery believe that the stronger the domestic market is, the stronger the export market will be. Imposing excise on jewellery will take us back to the past.
Do the industry players fear the return of the inspector raj as excise inspectors might visit jewellery shops?
Yes, we do believe so. An inspector from the department can just walk into any jewellery mart and demand the books of account even if the jewellery mart owner concerned may be a small-scale manufacturer who is exempt from tax. This will only heighten the hassles facing the industry.
Are the authorities justified in their concern over the rising import bill on account of gold?
Yes. But not the gold used for jewellery, but the gold which is sold as coins and bars, which is unproductive.
How did the export of Indian gems and jewellery acquit itself during fiscal 2011-12 and what are the prospects for the current fiscal in view of the levy on the import of gold?
Till January 2012 we achieved a growth of 15 per cent, but after that there was a decline in exports and imports.
As far as gold jewellery is concerned, it has gone down after the Budget as full production was not taking place owing to the strike, which also affected exports.
My guess is we might end up reaching $45-46 billion by way of exports of gem and jewellery in 2011-12, as compared with $43 billion in fiscal 2010-11.