Political uncertainty in Europe coupled with the fear that the government will bring gem and jewellery exports and imports under GST are worrying exporters, even though the overall exports in FY17 have risen by 9.85% over FY16. In value terms, total exports of gem and jewellery stood at $43.15 billion in FY17 compared with $39.24 billion in FY16.
Silver shines in the country’s overall gem and jewellery exports with a growth of 35.83% over FY16, while exports of gold jewellery have shown a meagre 1.92% growth over the last fiscal. Exports of cut and polished diamond posted a 10.24% growth. “Exports are expected to go up in FY18 provided that they do not come under GST. But if included in GST, then there will definitely be some impact on exports. Import of rough diamonds should not come under the purview of GST,” Praveen Shankar Pandya, chairman, Gem & Jewellery export Promotion Council, told ET.
He said that rather than bringing the sector under GST, the government should provide unique numbers to diamond traders, like in Belgium, which in turn will help the government keep track on the movement of diamonds.
The other worry among the jewellery exporting community is the political uncertainty in Europe. “There has been very little excitement in the European market since Brexit was announced last year. We are waiting for the outcome of the French elections. Unless there is clarity in EU, business is not likely to pick up,” Pandya explained.
In FY17, the UAE remained single largest importer for India accounting for around 32% of the total gems and jewellery followed by Hong Kong, the USA, Belgium and Israel. While almost all of the categories under gem and jewellery have grown, exports of coloured gemstones have declined 3.08% to $419.90 million in FY17, compared with $433.26 million in FY16.