Page 11 - Bullion World Volume 02 Issue 08 September 2022

Bullion World | Volume 2 | Issue 09 | September 2022

Ms Eshana Mukherjee
Research Associate, ICRIER trade with the UAE, strength of our for imports were Switzerland, UAE,

competitors, and how India can USA, Hong Kong, and Belgium,
gemstones’, India has offered enhance its export competitiveness. which together accounted for 67.8
phased tariff reduction. Over a 10- India is a key player in global gems percent of the total jewellery import
year period, the current effective rate and jewellery trade. With a rank in 2021-22.
of 7.5 percent will be reduced to 0 of 6 globally and exports worth
percent, for these subcategories of USD38.16 billion in 2021, India The share of UAE in India’s gems
jewellery. Being a major importer accounted for 5.31 percent of the and jewellery trade (exports and
of ‘unwrought gold’ (HS code total global exports of gems and imports) is thus significant. With a
71081200) and ‘unset/unworked jewellery. By product categories, share of 12.61 percent in India’s
diamonds’ (HS code 71023100), in the same year, India was the top jewellery exports, UAE was the third
India reduced the tariff imposed on most exporter of ‘cut and polished largest export destination of India
these goods. While for ‘unwrought diamonds’ (HS code 710239), with in 2021-22. Exports increased from
gold’ imports, India offered tariff a share of 35.7 percent in the global USD2773.7 million in 2020-21 to
relief of one percent in absolute exports, second-largest exporter of USD4953.11 million in 2021-22.
percentage terms and imposed a ‘plain and studded silver jewellery’ Of the total jewellery exported to
tariff rate quota of 200 tonnes over (HS code 711311), with share of UAE, ‘gold jewellery’ (HS code
5 years. The lower import duties on 24.7 percent, and the fourth largest 711319) accounted for over 55
raw materials are expected to help exporter of ‘plain and studded gold percent of the exports, followed by
in lowering the cost of production, jewellery’ (HS code 711319) with ‘cut and polished diamonds’ (HS
improve the competitiveness of a share of 10.7 percent. There has code 710239), at 33 percent. The
manufacturing and boost exports. been an overall increase in exports jewellery exports to the UAE have
The UAE can be used as a base to as global trade recovers from the seen a decline in 2020-21 (see
cater to third country markets like pandemic induced disruptions - Figure 1). Apart from supply chain
Africa. However, the overall benefits the export value increased by 50 disruptions, high import duty in the
of this agreement will depend upon percent between 2020-21 to 2021- UAE, increasing competition from
enhancing export competitiveness 22. Over 84 percent of the exports Turkey, in the ‘light weight gold
and value addition in the country. from India were accounted by five jewellery’ segment, withdrawal of
export destinations namely, the fiscal incentives given to SEZs and
India’s Gems and Jewellery Trade and United States of America (USA), uncertainty of the SEZ policy has
the UAE Hong Kong, UAE, Belgium and been cited as some of the reasons
To understand the benefits of the Israel. India is a net importer of gems for fall in exports by Indian firms,
CEPA with the UAE for the gems and jewellery and had a negative during a survey conducted by the
and jewellery sector, it is important trade balance of USD42395 million authors in 2021.
to examine India’s global trade, in 2021-22. The top five destination

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