The government expects export growth of six per cent a year for the gem and jewellery industry, which is going to be the new normal.
The industry has already been priced out in the global market with 10 per cent import duty on bullion and intense competition countries such as Dubai and Thailand.
Speaking to media on the sidelines of the India International Jewellery Show, Manoj Dwivedi, Joint Secretary, Ministry of Commerce and Industry, said most developed countries have stopped the special preference given to India as exports from the country have crossed the threshold limit.
Going ahead, he said the gem and jewellery industry should strive to ensure that the growth does not slip and achieve at least six to seven per cent export growth.
Gems and jewellery net exports declined in FY’16 to $32 billion, as compared to $36.2 billion the previous year. However, it recovered to register nine per cent growth to $36 billion in FY’17.
“We have urged the Finance Ministry to reduce import duty on gold to two per cent from 10 per cent with the concern over high gold imports impacting Current Account Deficit fading. An announcement in the next Budget is expected,” said Dwivedi.
Some of the decisions were held back due to the GST rollout, but now each one of them including cut in gold import duty will be taken up for consideration, he said.
The government is also looking into a report submitted by the industry on the procedural difficulty in complying with GST, he added.
The industry has demanded that instead of paying GST on goods made for exports and wait for reimbursement, the government should accept an undertaking by the exporter to exempt GST or devise a similar alternate mechanism so that working capital is not locked, he said.