MUMBAI: It was the turn of Commerce Minister Suresh Prabhu to bat for genuine credit needs of the gems and jewellery industry, just a week after his ministerial colleague Nitin Gadkari complained about the Central bank’s regulatory measures blocking financial closure of infrastructure projects. Prabhu, speaking at the Gem & Jewellery Export Promotion Council (GJEPC) event in New Delhi on Friday, said he has taken up the issue of funds for an industry that is one of the largert exporters and job creators in the country.
Credit to the gems and jewellery industry got tightened after the unfolding of Nirav Modi scandal, where Punjab National Bank was left gaping with a multi-million loss over fraudulent Letters of Undertaking, and a similar modus operandi by Geetanjali Gems. Apart from credit, the minister also flagged the issue the industry has been complaining about, the import duty on gold, the main raw material for the industry.
“We seek ease of doing business and rationalisation of import duties on gold to 4 per cent, so as to reduce working capital blockages and give impetus to value-added gold jewellery exports,” said Pramod Kumar Agrawal, chairman, GJEPC. The industry is also seeking reduction in the duty on diamond from 7.5 per cent to 2.5 per cent.
Prabhu said the ministries are looking at the industry’s demand of cutting import duty on gold to 4 per cent from the current 10 per cent. “India has the potential to double its gold jewellery exports to $18 billion by 2025 and add 3 million more jobs to the 5 million people directly employed by the industry,” Agrawal said.