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Our Bureau

New Delhi, July 28

The latest adoption by the European Union (EU) of a new regulation applying the generalised system of preferences (GSP) for the period from January 1, 2009, until the end of 2011, allowing the EU to maintain preferential access to its market would help benefit the Indian gems and jewellery sector.

For India, this review brought some cheers as the gems and jewellery sector (Section XIV) will benefit again from the tariff preferences offered by the GSP.

In 2007, India’s exports to EU, of jewellery, pearls, precious and semi-precious stones and metals were worth €2.1 billion. India is the largest beneficiary of EU’s GSP scheme.

In 2007, preferential imports entering into EU from India under the GSP reached €11.3 billion compared with €9.6 billion in 2006.

According to a communiqué from Brussels, the renewed preference system would ensure that GSP is targeted at those countries that need it most. GSP provides real economic value to developing countries, with €57 billion worth of trade under the scheme in 2007.

The EU Trade Commissioner, Mr Peter Mandelson, said, “The continuation of GSP will ensure stability and predictability for beneficiaries and traders in the EU and developing countries. GSP is a vital tool of our pro-development EU trade policy.”

As a result of re-calculations to reflect the evolution of trade, preferences for specific product groups will be re-established for six beneficiary countries of GSP (Algeria, India, Indonesia, Russia, South Africa and Thailand).

Preferences will be suspended for one country, Vietnam, for Section XII products (footwear and some other products). These adjustments are triggered automatically when a country’s performance on the EU market goes above or below a certain threshold. This procedure follows strict rules, and helps to ensure that the benefits of GSP preferences are targeted at the countries that need them most.

Suspension of preferences, called “graduation”, reflects the fact that a particular country is competitive in the EU market for the products in question.

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