India has been rated as the largest manufacturer of gems and jewellery.
Indian gems and jewellery industry contributes over 12 percent to the total export earrings of the country and there are around 1.5 million workers employed in this industry who are highly skilled and efficient.
But the industry faced a crucial time as it was hit hard by the global economic slowdown in the financial year 09-10.
Still the gems and jewellery industry accounts to be a major exchange treasury as the major part that is estimated around 80 percent of its turnover was the outcome of the exports.
It is further classified into five main segments: cut and polished diamonds, gemstones, gold and jewellery, pearl and synthetic stones, and others, which includes the precious metal jewellery except for gold, synthetic stones and costume fashion jewellery.
Gems and jewellery industry is often referred as the diamond industry as nearly 80 percent of the entire turnover of this industry is contributed by diamonds.
According to Gems and Jewellery Export Promotion council i.e. GJEPC the export of cut and polished diamonds have gone down by 8 percent which is near about $13024.53 million in financial year 09-10 as against $14194.
13 million in the previous year. End of March 09 again faced a fall in the quantity of cut and polished diamond by 7 percent to 402.05 lakh carats.
In the financial year 2010, the industry was hit hard because of the increasing demand from the export-oriented countries.
Now the industry with its apex body is striving hard to improve on its lost competitiveness and is seeking for some measures with the help of the government to overcome this melt down and fall in prices.
In order to come out of this problem the industry looked at the immediate necessity of increasing the flow into the industry by continuing the present credit limits to the exporters with a good past record and improving the credit facilities as well.
They introduced Presumptive Tax/Turnover Tax, which acted as the permanent solution for the particular nature of this industry characterized by the fluctuation in prices that further lead to dispute on taxation.
Further, it looked for rationalization of interest rates at par or lower than the international rates.
The RBI was urged to make dollar finance available at LIBOR + 1% to the banks, which were financing the gem and jewellery industry until 31st December 2011; as against LIBOR + 3.5% and extra charges og handling and commissioning.
Apart from this, the industry even made the request of making the export income tax free for 2 years.
By declaring the income tax free it is seeking income from that and has also asked for proper and prompt refunds to be made against the Indirect Taxes paid by exporters on account of service tax, VAT and other local taxes like state wise octroi charges, etc.
They also asked introduction of Duty Drawback on gold at Rs 100 per 10 gm as it would overcome the obstacle hindering the export of gold, gem and jewellery.
Last thing to consider is that Labor Intensive Industry is looking forward to introduce the new scheme and it be called as NSMEGS – National Skilled Manufacturing Employment Guarantee Scheme.
This scheme will be for the Gem & Jewellery Industry in lines with the National Rural Employment Guarantee Scheme.
The most important objective of this scheme is to enhance the quality and livelihood security of skilled manufacturing sector by providing at least 100 days of guaranteed wage employment to gem & jewellery artisan.