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Export of gems and jewellery from India dipped about 18.33 per cent to $18.09 billion during April-October due to declining prices of gold, weak global demand and a sharp rise in the return of consignments.
The outbound shipments were worth $22.15 billion during the first seven months of last fiscal 2014-15, as per the provisional data of the Gems and Jewellery Export promotion Council (GJEPC).
Declining gold prices and global demand slowdown is the major reason for dip in exports besides increasing rejection of domestic consignments, exporters body FIEO said.
“Rejection rate of our consignments are high. We need to put special focus on skilling of people in this industry.
China is the biggest competitor of India in the sector and their workforce is very skilled,” Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said.
Consignments rejected
During the 7-month period of the current fiscal, consignments worth $4 billion were returned compared with $1.78 billion during April-October 2014.
In October, exports from this labour intensive sector contracted by about 13 per cent year-on-year to $3.48 billion. The sector contributes about 14 per cent to the country’s total exports.
The industry is seeking a cut in gold import duty to ensure adequate supply of the metal and help meet export demand for jewellery.
Gold import duty
To check high current account deficit, the government had hiked the import duty on gold to 10 per cent.
According to the GJEPC data, exports of cut and polished diamonds fell to $12.2 billion in April-October 2015 from $14.31 billion in the same period last year.
Similarly, shipments of gold jewellery contracted to $2.38 billion from $3.27 billion during April-October 2014.
Exports of gold medallion and coins, however, increased to $2.71 billion during the seven-month period of this fiscal from $1.22 billion in the same period last year.
Overall India’s exports remained in the negative territory for the 11th month in a row by registering a dip of 17.53 per cent in October to $21.35 billion.
The government has expressed hope that incentives such as 3 per cent interest subsidy and enhanced rate for duty drawback could help contain the declining.
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