DGFT defers wastage norms for jewellery and gem exports after industry body plea
Wed May 29 2024
The Directorate General of Foreign Trade (DGFT), India’s rulemaking body on global trade, deferred new norms on permissible wastage for jewellery and gem exports to July 31, after a prominent industry body argued that the new norms would hurt micro, small, and medium enterprises (MSMEs). The Gem and Jewellery Export Promotion Council (GJEPC) said it held an ad-hoc meeting with the DGFT to defer the enforcement of new norms on wastage in the export of gold, silver, and platinum products, India’s third-largest export commodity.
The revised norms would have a disproportionate impact on MSMEs, which account for 85% of jewellery exporters, the GJEPC said.
Suggestions sought
The DGFT has given stakeholders time till 31 July to provide more suggestions on Standard Input Output Norms (SION). The government announced a change in policy on 27 May after consultations with the industry in March this year on the subject.
Soon after, the DGFT said it had put the new norms on hold till industry stakeholders proposed changes to SION. “By putting the revised wastage norms on hold till 31 July to provide detailed inputs on wastage in various jewellery categories, DGFT through its immediate action, has avoided an immediate standstill of exports,” said Vipul Shah, chairman, GJEPC.
Jewellery exports, which make up nearly 16% of India’s outgoing trade, have risen in the first three months of 2024, according to the ministry of commerce and industry data. Despite this growth, India’s jewellery exports in FY24 fell marginally compared with the last fiscal year.
The DGFT will now wait till 31 July to tighten wastage norms. In its 27 May amendment to export policy, the government reduced the wastage limit on gold and platinum jewellery to 0.5% from 2.5% and on silver jewellery to 0.75% from 3.2%.
This means artisans working on export-quality items will need to cut down on the wastage of precious metals. Meanwhile, wastage limits on jewellery manufactured by the mechanical process were reduced to 0.2% from 0.9%.
The government has also reduced the wastage limits on gold and gold-studded idols and coins made of precious metals. The Standard Input Output Norms in the existing jewellery export policy says the wastage limit is 2% for objects that are not mentioned in the rules, and if manufacturers need to extend it, the DGFT will decide on it on a case-by-case basis. Stakeholders have to come up with changes to this rule before 31 July.
Till then, India’s jewellery export policy will remain unchanged, the DGFT said in a notice dated May 28.
Source: https://www.livemint.com/