24 Jul 2019
DiamondWorld Directory
Home |
Archival
Home
Glancing Back…
Recap of 2014
By: Diamond World News Service
|
Jan 3 2015 3:25PM
|
Reference: 11005  

DecreaseIncrease
The year of 2014 has been tumultuous and that is almost an understatement. The liquidity crunch is being felt all over as the banks are taking an exit. The winding down of the Antwerp Diamond Bank added to the woes. The decision of Export Credit Guarantee Corporation of India to remove automatic cover on loans given by banks to the gem and jewellery industry perplexed all.

Topping that is the overbearing threat of man-made diamonds being sold as naturals is a bane to the whole industry. The confusion of Surat or Mumbai is still looming and it may soon be a reality as the Gujarat Chief Minister, Anandiben Patel has allotted a large plot of land in Surat for the diamond bourse. Basically, the year 2014 was filled with doubts and perplexing news as the lack of transparency in the trade started rearing its ugly head.

But, there were some good news too such as PM Modi coming in power and giving a slight respite in the Union Budget. In addition, the taking off the World Diamond Mark in Turkey and the recovering U.S. market are in the bunch of good news bouquet. With so many newsflashes, Priyanka Desai decided to give you an overview of the top 10 news pieces that have affected the diamond industry in 2014.

Union Budget 2014
Indian Finance Minister Arun Jaitley presented the Narendra Modi government’s first budget, which did not reduce the import duty on gold. The Finance Minister has, however, rationalised the import duty on polished diamonds to 2.5 per cent.

Union Finance Minister, Arun Jaitley in his speech said, "Semi-processed, half cut or broken diamonds are presently exempt from basic customs duty. As against this, cut and polished diamonds and coloured gemstones attract basic customs duty of 2 per cent. To prevent misuse and avoid assessment disputes, the basic customs duty on semi-processed, half cut or broken diamonds, cut and polished diamonds and coloured gemstones is being rationalised at 2.5 per cent. To encourage exports, pre-forms of precious and semi-precious stones are being fully exempted from basic customs duty.”

"We are happy that our recommendation to rationalize import duty on broken diamonds and withdrawal of import duty on semi-precious and precious stones have been accepted. Also rationalisation of import duty on processed diamonds to 2.5 per cent will help the domestic manufacturing sector,” said Vipul Shah, Chairman, Gem and Jewellery Export Promotion Council (GJPEC).

The rationalization of custom duty on imported diamonds and semi-precious stones is expected to reduce classification disputes to a very great degree and prevent unproductive time usage spent in such disputes. While the rationalization will upsurge the raw-material cost marginally, it will more than compensate by the government's initiative to encourage exports and its incentives.

Amendment in lenience condition in the case of re-import of cut and polished diamonds after certification/grading from a foreign laboratory/agency where a alteration not exceeding +- 0.05mm in diameter for round shape diamonds and +-0.07mm in length and breadth for diamonds of other shapes shall be permissible. The acceptable alteration in weight remains unaffected. The classification of ‘micro’, ‘small’ and ‘medium enterprises’ had been revised in the budget to deliver for a higher capital ceiling. Budget 2014 has announced plans for Formation of an Export Promotion Mission along with the State by the Central Govt. to advance the infrastructure for exports in all states. It also projected the launch of a national multi-skill program called Skill India accentuating on employ-ability and entrepreneur skills in youth. Restoration of the Special Economic Zones (SEZs) was presented to make them operative devices of industrial production, economic growth, export promotion and employment generation.

The Union budget fell short at relieving the Indian gem and jewellery industry from its most deep-rooted issues – the 80:20 scheme, and reduction in gold import duties. The industry is not very happy with this. Prior to the budget, the industry rightfully held hopes on two grounds – it had been making representations to the government to ease the hurdles in its growth and secondly this was the maiden budget from the newly formed Narendra Modi Government, a man who is perceived as ‘pro growth’. One is reminded of the times during the Congress government when norms affected gold imports resulting in a shrinking domestic demand, rising fears of gold smuggling and many protests by jewellers to raise their concerns to the government.

Although, the budget has delivered some positivity in imposing 2.5 per cent custom duty on semi processed and half cut, polish, gemstones, diamonds, exempting pre-forms of precious and semi-precious stones from custom duty. It also gave hope that a renewed focus on promotion of exports and reviving the SEZs in the country will lead to some concrete results. But, will this mean the industry is heading for another lean period for the gold jewellery market? Also, what will be the fate of exports and manufacturing and the jobs for artisans?

Banks More Cautious & Stringent
Credit is the lifeline of any business, especially when companies want to go into expansion mode. The first door they usually knock on for credit is that of private and public sector banks. However, it is reported that banks have become more cautious about lending finance to gems and jewellery companies following reports of default in payments.

Says one banking official on conditions of anonymity, “There has been an increase in the number of willful defaulters in the gems and jewelry trade, where the company has the assets to repay the loan but is unwilling to. Private banks have almost 2 per cent of bad loans in this segment, while the percentage would be double in the case of public sector banks.”

First | Previous | 1 | 2 | 3 | Next | Last | All

Have Your Say
* Your view
* Name:
* Email:
* Town/city:
* Country/State:
Advertisement
HouseAd_Trade Fair
Search News by City
Advertisement
Kosher 23460
Advertisement
HouseAd_Trade Fair
Recent Issue
2019
AVAILABLE NOW...!
Advertisement
Kosher 23460
News in Pictures
Videos
Stunning Jewellery from Cannes 2019
Pictures: 24
Sparkly Jewels at Oscars 2019
Pictures: 19
Golden Globes 2018
Pictures: 15
Spotted: Who Wore What (December 2018)
Pictures: 4
India Diamond Week
Pictures: 8
Spotted: Who Wore What (October 2018)
Pictures: 7
Spotted: Who Wore What (September 2018)
Pictures: 6
70th Emmy Awards
Pictures: 11
35th India International Jewellery Show 2018
Pictures: 46
Spotted: Who Wore What (August 2018)
Pictures: 4
JJS - IJ Jewellers Choice Design Awards 2015 powered by GIA
Views: 15620
GJEPC Chairman Interview
Views: 14388
IJ Jewellers Choice Design Awards 2012 - Part 1
Views: 21250
Promo for IJ Awards 2012 at NDTV Profit
Views: 34022
IJ Jewellers Choice Design Awards 2012- Part 2
Views: 37339
Couture India 2016 - A Business Boutique Show by IJ Magazine
Views: 11886
Savjibhai Dholakiya, Surat Businessman (Diamond Merchant) speaks in Vibrant 2015
Views: 35507
IJ Jewellers Choice Design Awards 2013 - NDTV Video
Views: 33510
Member of:
Supporter of: