The recent Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA), comprising Switzerland, Iceland, Norway, and Liechtenstein, marks a pivotal moment for the Indian gem and jewellery sector.
The Gem and Jewellery Export Promotion Council (GJEPC) has announced that this agreement is set to triple the sector’s growth, leveraging duty-free access to boost exports from the current US$335 million to an anticipated US$1 billion in the near future.
Duty-Free Access and Export Growth
One of the key highlights of the TEPA is the removal of customs duties on Chapter 71 products, which includes gems and jewellery, thereby granting Indian exporters duty-free access to the EFTA countries. This strategic move is expected to significantly enhance India’s competitiveness in these markets, where total imports of finished gem and jewellery products stand at US$12.3 billion. Currently, India’s share is a modest 2.7%, suggesting ample room for growth and expansion into these untapped markets.
Comprehensive Trade Benefits
Beyond duty elimination, the TEPA agreement encompasses several other benefits aimed at fostering bilateral trade. Noteworthy among these is the provision for duty-free imports of gems and jewellery from EFTA nations into India, coupled with reductions in customs duties on a range of products including cut and polished diamonds, lab-grown diamonds, and coloured gemstones. The agreement also envisages a 1 per cent reduction in the duty on precious metal gold imports from EFTA countries, further incentivising the trade relationship.
Industry Perspectives and Future Outlook
GJEPC Chairman Vipul Shah expressed optimism about the agreement’s impact, noting, “The $100 bn bilateral trade pact has opened up immense opportunities for Indian gem and jewellery manufacturers to broaden their export prospects in the EFTA region.” He highlighted the potential for exporting fine gold jewellery, silver jewellery with high gloss and matte finishes, as well as luxurious diamond and coloured gemstone jewellery.
The council has been instrumental in the negotiations, advocating for the industry’s interests and ensuring that the agreement aligns with the sector’s aspirations. The TEPA is seen as not just a trade agreement but as a foundation for future Free Trade Agreements (FTAs) with other European countries, positioning India as a key player in the global gem and jewellery market.
