Role of Government to boost exports of Gems & Jewellery from India

--India’s present foreign exchange earnings from Gems and jewellery sector is in the range of US$ 36 to 43 billion per annum during last five year from 2015 to 2020. Being huge potential of its growth, the government has set an annual target of USD 75 billion in jewellery exports by the year 2025. (Source – GJEPC India, Ministry of Commerce & Industry). In order to achieve this daunting goal, the government has declared Gems and Jewellery sectors a focus area for export promotion and under taken various measures to boost its exports by way of liberalisation in export policy, extending financial support, technology up gradation and skill development .This research paper attempts to analyse the various strategies adopted by the government to achieve the set target. For this research, primary and secondary data have been collected and analysed. The findings of the study would be very useful for the growth of exports. KEYWORD: G&J, Jewellery Exports, Government Article Received: 10 August 2020, Revised: 25 October 2020, Accepted: 18 November 2020


I. Introduction:
The Gems and Jewellery Sector is considered as one of the most significant export oriented industries in India. It contributes 7% of GDP and 12 to 17 % of merchandise exports of the nation and provides employment of around 5 million people. The Gems and Jewellery industry has come up a long way from its small beginnings during 1950s to emerged now as the world's largest processing centre of cut and polished diamonds. At present, India processes over 65 per cent of the world's polished diamonds in value terms, 85 per cent by volume and 92 out of 100 number of pieces are cut and polished in India. The Indian jewellery market is growing at a Compound Annual Growth Rate (CAGR) of 11.26%, during 2016-2021. The government has played a very significant role for its better CAGR such as introduction of ease of doing business policy, liberalization import/export policy etc. This sector being highly export oriented and labour intensive one, it contributes significantly in foreign exchange earnings and generation of employment.

II. Literature Review
Review of literature is the most simple and fruitful basis of formulating the research problems precisely.
Keeping in view the objective of study on the above subject, the following literature have been reviewed.
I. The research work of Ms. Richa Devgun, Dr. J.S Bhatnagar under title " A Review of Government Policies and Schemes of Gems and Jewellery Industry" suggests that though G&J sector significantly contributes 17% of the India's exports, this sector is highly unorganised and it is completely dominated by family jewellers. It is suggested by them that to fasten up with the new trends in global market proper product planning and development is highly recommended. V.

HYPOTHESIS:
1. There is ample scope and high potential of growth of exports of gems and jewellery. 2. Simplification of custom procedures for smooth functioning of export/import. 3. To focus on e-commerce trading.

V. Research Methodology
The study is conducted to analyze the role of government to facilitate the export trade of gems and jewellery .In order to conduct a thorough research, primary and secondary data have been collected from different sources. and manufacturing destination for foreign business entrepreneurs also. SEZ located in Santa Cruz, Mumbai is the most significant SEZ for exports of gems and jewellery. SEZs contribute very prominently in exports of gems and jewellery. More than 30% of exports of gems and jewellery are done from Special Economic Zones (SEZs).

Incentives for setting up in an Indian SEZ
In order to encourage the exporters, the government has provided many incentives to them for setting up their units in SEZ, these are as follows: • Exemption from Duty for their import and domestic procurement of goods for the development, operation, and maintenance of your company; • 100 percent exemption in income tax for first five years on their export income, 50 percent for next five years, and 50 percent of the export profit permitted to reinvest in the business for the next five years; • Exemption from the GST and levies imposed by state government (supplies to SEZs are zero rated under the IGST Act, 2017, in other words they are not taxed); • Single window clearances for all state and central government approvals; • Concession in electricity charges by certain states in India; • Deployment of customs officers in the SEZs to facilitate the export/import trade. • State government provided land to SEZ developers at concessional rates to promote their economy.

XII. Formation of Common Facility Centres (CFCs)
In order to improve the productivity and quality of gems and jewellery products manufactured by small and medium entrepreneurs, it is essential to provide them access to advanced technology. To facilitate them, the government through GJEPC has set up four Common Facility Centres (CFCs) at Visnagar, Palanpur, Amreli and Junagadh for the diamond sector. New CFCs are also being built at Coimbatore, Kolkata, Delhi, Jaipur, Hydrabad and Rajkot.
These CFCs are proving very beneficial for MSMEs as their productivity has increased substantially and manufacturers are now able to produce goods of international standards. For setting up of such CFCs, the government grant financial as well as infrastructural support. Such CFCs are operated and maintained by the local Gems and Jewellery associations.
With the success of existing CFCs, another two Mega CFCs in Mumbai and Delhi are likely to established soon. These Hi tech mega CFCs would be able to fulfill the future needs of the G&J sector and play a key role in making India as the global leader in the fields of innovations and R&D of Gems and Jewellery sector.

XIII. Usefulness of E-Commerce Policy
Trading through E-commerce has a huge potential for giving a boost to gems and jewellery exports. However, due to certain technical as well as procedural complication such as logistics network and physical documentation, exporters are unable to grab this opportunity to maximize their exports. At present, exports of gems and jewellery from India through e-commerce is very negligible i.e. 1-2%. Export/Import trade of G&J are mainly done by way of B2B transaction. If B2C transaction through ecommerce is promoted, it would give additional boost to exports. In this context, it is pertinent to mention that in USA, which is the main market for jewellery, levies Nil customs duty on consignment valued up to USD 800. On this basis, GJEPC has made a formal request to the Government for implementation of such facilitation in Courier Import & Export Regulations 2010 by CBIC to allow export and import of G&J valued up to USD 800. These facilitation would be of great benefit for the trade. China, USA and other leading countries are nowadays dealing more and more through ecommerce in their B2C trading. Websites like Alibaba.com, eBay, Amazon, Etsy etc, are actively involve e-commerce trading. Indian government is serious about implementation of e-commerce policy. Works like devising detailed SOPs, ensuring complete end-to-end tracking of the goods are under progress, to make e-commerce mode of trading as more effective.

XIV. India is one of the members of KP Certification for Import/Export of rough diamonds
India is one of the founder members of the Kimberley Process Certification Scheme (KPCS). It was constituted with the approval of the United Nations Organization in order to prevent the trade of conflict diamonds. Presently, KP has 54 participants representing 81 countries (European Union's member states have one representative) which covers 99.8% of the rough diamonds worldwide.

XVI. Recent developments
In recent past, due to the excessive import of gold, the government has imposed restrictions on import of precious metals. Gold in any form can be imported by certain nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). However, import under advance authorization and supply of gold directly by the foreign buyers to exporters against orders have been exempted from restriction. Gold and silver dore have also fall under restricted list however refiners can import the same against license under actual user condition for making the finished products meant for exports only. Similarly, Star and premier trading houses can import gold only for export purpose, whereas those willing www.psychologyandeducation.net to buy gold for sale in local market can purchase the same on consignment basis or through metal loan from authorizes banks or agencies like MMTC, PEC, etc. Presently, Gold attracts 12.5% import duty and 3% GST. XVII. Formation of Special group to resolve gems, jewellery industry issues In order to facilitate the G&J trade with the objective of ease of doing business, the government has formed a special group comprising of customs and banking officials, headed by the Member Customs to resolve various issues faced by the trade.
The GJPEC has made a representation for several reliefs which include reduction in import duty of polished diamond from 7.5 per cent to 2.5 per cent, clarification on Online equalization Levy for B2B International diamond auctions, e-commerce facilitation, GST related issues among others.
During the COVID-19 pandemic, the RBI has extended huge support to the industries by way of reducing the statuary ratios and infusing the much needed liquidity to them, however, the GJEPC has urged RBI to relax the interest rates and margins applicable on export finance, provide interest subvention in such crisis situation across all sectors for traders and manufactures up to 5% and give permission of extension of credits and export bills for a period of 3 to 6 months on the basis of business cycles of the industry.
The G&J industry has made a request to the government to permit them to sale of rough diamonds at the special notified zone. It would fetch higher tax collection and promote Aatma Nirbhar Bharat Yojana.
GJEPC has made a suggestion that turnover tax should not exceed 0.16 per cent as it is levied in Belgium (Antwerp) which would facilitate the miners to log their sales in India without maintaining separate accounts.

Few suggestive measures:
During the research, it is observed that there can be an exponential growth in exports of gems and jewellery products if the government consider on following points: 1. Currently, rough diamonds are sent to the Special Notified Zone at Mumbai in India by diamond miners for viewing purpose only. Sale is not permitted there on account of the fact that the sellers would be considered as permanent entities and income tax would be livable to avoid this, sellers have no option but to take back their rough diamonds back to their countries. The government should make a provision to permit them to sell their rough diamonds to Indian manufacturers in SNZ, India without any tax liability. This will help Indian manufacturers to buy their required rough diamonds in India without travelling foreign countries. 2. To extend more facilities to the exporters to conduct their B2C trading through ecommerce platform. 3. Simplification of customs procedures in export/import of goods.
It can be said that the role of government in exports of gems and jewellery has been very positive and significant. It is certain that the growth of export of this industry can be reached to desired level in near future with the help and support of government.