Accenture hired to bring sheen back on gem exports

KOLKATA: The Gem & Jewellery Export Pro motion Council has hired consultancy firm Accenture to prepare a roadmap to revive India's six jewellery special economic zones (SEZs) as Thailand and China intensify competition in the exports market.
"Nearly half of the units in SEZs are closed as there have been policy issues regarding SEZs," said Colin Shah, managing director of diamond jewellery exporter Kama Schachter.

"The exit policy, labour laws and tax-related things need to be reworked."

Once Accenture comes up with its recommendations, they would be submitted to the government for consideration, Shah said.

Several Indian jewellers have invested in overseas SEZs to avoid policy problems at these export-oriented business parks back home. Now, with the new government giving a special focus on SEZs, the jewellery industry wants to take advantage of it.

The Union Budget unveiled last month fully exempted pre forms of precious and semi-precious stones from basic customs duty as part of steps aimed at boosting ex ports. Gems and jewel lery exports figure among India's main sources of foreign currency. There are six SEZs in India for gem and jewellery SEEPZ, Jaipur SEZ, Noida SEZ, Vizag SEZ, Hyderabad SEZ and Manikanchan in Kolkata. Over the years, these business parks have gradually lost a major chunk of business to jewellery makers in domestic tariff area (DTA), or those located outside SEZs, due to policy issues.

In the first three months of current fiscal year, exports from DTA had increased more than two-and-half times to Rs 6,973.95 crore from Rs 2,553.38 crore during April-June last year. On the contrary, shipment of gold jewellery from SEZ and export processing zones ­ including gold jewellery and gold medallions and coins ­ had fallen 29% to Rs 4,702.02 crore. In fiscal 2014, exports to from DTA went up more than two-and half times to Rs 34,723.30 crore, whereas exports from SEZ declined 63% to Rs 32,196.34 crore. Not just exports, imports to DTA are increasing as well.
During the first quarter of this fiscal year, imports of cut and polished diamond into SEZs had dropped 78% to Rs 1,608.52 crore from a year earlier.