Apex industry body ASSOCHAM, on Tuesday, urged the Government to grant an industry status to the Gems and Jewellery (G&J) sector and proposed a 7-pronged strategy for arresting the continuous fall in exports from this sector.

 

“This will have a multiplier effect and result in increasing demand for gems and jewellery which will have a vital and positive impact on output, employment, value addition and indirect tax collections,” noted the study titled “Gems & jewellery industry: Contributing to Make in India,” conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) jointly with Thought Arbitrage Research Institute (TARI).

 

The study was jointly released here by D S Rawat, Secretary-General, Assocham, and Ms. Bhagyesh Soneji, Chairperson Assocham Gujarat Council.

 

Overall exports from gems and jewellery sector in India during the first six months of fiscal 2015-16 stood at $19.22 billion and registered a decline of 5.59 per cent over the $20.3 billion worth of exports in the same period last year.

 

“Gems and jewellery sector might register a decline of about 15 per cent in the wake of severe economic downturn in major export markets of China and the Eurozone,” said Rawat. “Granting industry status can give a fillip to investments and bring down costs of operation in the sector. Besides, it will help build trust and faith in Indian brands in the global markets and in achieving goals of Make in India.”

 

Modernisation of labour laws, requirement of more export-oriented economic zones, establishment of a gold board, ensuring access to better financing, relaxation of certain taxation laws, segregation of investment and consumption demand, setting up a gold tourism circuit are certain key areas focus on which can help in reviving the G&J sector in India, suggested the study.

 

Growth in gems and jewellery sector can be a single panacea to all problems of Indian economy owing to strong backward linkages of the sector with ancillary industries, noted the study. Planned and systematic efforts by the government like removal of barriers stifling growth of the gems and jewellery sector and introduction of policy initiatives to boost growth are significant to sustain the potential of this sector.

 

The study also pointed out that young workers are shunning the gems and jewellery sector and moving to other lucrative industries in the manufacturing sector.

 

“The average salary in Indian gems and jewellery sector at Rs 2.52 lakh per annum is perhaps the lowest amid manufacturing industries like pharmaceuticals (Rs 5.09 lakh), capital goods (Rs 4.94 lakh), electronics (Rs 4.43 lakh), chemical (Rs 3.97 lakh), automotive (Rs 3.77 lakh), construction material (Rs 2.88 lakh), metal and metal products (Rs 2.54 lakh).”

 

Inadequate working conditions and limited compliance with health and safety standards have also led to poor worker interest in this sector. Unorganised players and small-scale enterprises are not known to use cutting edge technology and high quality materials in their manufacturing processes, another major reason crippling growth of gems and jewellery sector in India, it pointed out.

 

Employment in Indian economy can increase by more than five times with the rise in employment within the gems and jewellery sector. Besides, value addition and indirect tax collection can also increase by more than four times and three times respectively.

 

Penetration of large retailers in the gems and jewellery sector will provide required growth impetus, open new opportunities of evolution and progress, attract investments, bring down costs of operation and increase global reach of domestic brands.

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