Union Minister for Commerce and Industry, Piyush Goyal, has announced the introduction of the Diamond Imprest Licence at the 40th edition of the India International Jewellery Show (IIJS) Premiere 2024 in Mumbai.
The announcement, made during an interactive session, is expected to provide significant benefits to Indian MSME diamond exporters.
Diamond Imprest Licence: A Long-Awaited Policy
The Diamond Imprest Licence, which has been a long-standing recommendation of the Gem & Jewellery Export Promotion Council (GJEPC), will enable eligible Indian diamond exporters to import a minimum of 5% of the average export turnover from the preceding three years.
This policy is intended to support MSME exporters by providing more equitable opportunities alongside larger industry players. Previously, the threshold was set at 10%, and although the new figure is lower, it still marks a crucial support measure for smaller exporters.
The policy aims to curb the flight of investment from Indian diamantaires to foreign diamond-mining destinations, thereby retaining more of the value chain within India. According to GJEPC, this initiative will also generate additional employment opportunities in the diamond sector, particularly in the areas of diamond assorting and the processing of semi-finished diamonds.
Broader Government Initiatives and Future Prospects
In addition to the Diamond Imprest Licence, Mr. Goyal discussed several other government initiatives aimed at supporting the industry. He acknowledged the current space constraints faced by the IIJS Premiere and committed to exploring the possibility of creating a 2 million square foot exhibition space for future editions of the show. This would further cement India’s position as a key player in the global gem and jewellery market.
On the international front, Mr. Goyal mentioned ongoing negotiations with the G7 and other developed nations, aimed at strengthening trade relations. The Indian government is also engaged in discussions to establish a diamond trading centre in Mumbai or Surat, similar to the one in Antwerp, and is working with De Beers on the Kimberley Process to enhance diamond traceability.
Mr. Vipul Shah, Chairman of GJEPC, also emphasised the importance of the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which has led to a 40% increase in gem and jewellery exports to the UAE. He expressed optimism about the future, citing the potential boost to exports from upcoming Free Trade Agreements (FTAs) with the UK, EU, and Canada.
Impact on the Indian Gem and Jewellery Industry
The introduction of the Diamond Imprest Licence is a strategic move to bolster the Indian gem and jewellery industry, particularly in light of the challenges posed by global economic conditions. The industry, which has been impacted by high duty rates on gold, silver, and platinum, will likely see some relief from the recent reductions announced in the Union Budget. As Mr. Goyal highlighted, the reduction in duties is expected to channel more gold and jewellery through official channels, which should in turn lead to increased job creation within the industry.
Mr. Goyal further urged exporters to focus on value addition, especially as the global market shifts away from high-cost products towards intricate, artisanal jewellery. “The world is not looking for high-cost products or jewellery, but intricate products with diligent workmanship, exquisite artistry, and bespoke handmade jewellery. Discerning customers will always seek value for money,” he said.
