8% of India’s annual gems and jewellery shipments have been bought by the European Union. To EU the Indian gems and jewellery shipments are worth $39 billion.
The exports worth more than $ 3 billion from the Indian industry may take a hit as India is not included in the latest GSP (Generalized System of Preferences) list for gems and jewellery sector of the European Union. From the origin to destination countries Under GSP tax incentives are given. In the gems and jewellery sector, Since last three years as India had GSP status and so in the EU countries, the Indian exporters got a benefit of 2.54% on customs duties and on value added tax between 20-25 per cent. In 2014-15, the gems and jewellery export saw a rise to $3.6 billion. In 2015-16, it declined to $3.2 billion as market conditions were not favourable. The new list has already been released and this regime will end in this month and India is not on the list in this sector.
As per non-GSP commodities, now the customs duties and VAT that India gems and jewellery exporters will have to pay will be applicable. By the EU, About 8% of the annual shipments of gems and jewellery, worth $39 bn are taken. To the EU, the decision will definitely hit our exports. With the ministry of commerce very soon, we would certainly take up this issue, said by Gems and Jewellery Export Promotion Council Chairman Praveen Shankar Pandya.
The international industry is already very unclear and this exemption out of the GSP list is including further threats. As the rates will increase, the Indian gems and jewellery will become uncompetitive.