Tiruchy's iconic gemstone needs government support to compete with China
TIRUCHY: The `Make in India' slogan had inspired a few gem merchants in Tiruchy to resume the production of 'Tiruchy kallu' or Tiruchy synthetic stone, famous even during the British era. But multiple taxes and lack of government support to this industry have given reason for gem manufactures to think twice.
Tiruchy synthetic stone once accounted for the lion's share of the jewellery industry but lost ground after the arrival of stones from China. With the Chinese government offering more support to the industry, Chinese manufacturers have been able to grab control of the Indian jewellery market with stones priced at a much cheaper rate.
Last year, a gem merchant from Tiruchy had imported a machine from China to resume production of Tiruchy stone, but later realised this may have been a mistake. "The machine itself costs about Rs 20 lakh. We have to pay about 18 per cent GST and 10 per cent import tax. So, the government is getting about Rs 5.6 lakh as tax from us. This has discouraged other gem merchants, who aspire to resume the production of Tiruchy kallu," said Rajashekar, who imported the machine from China.
Rajashekar is now the sole manufacturer of Tiruchy stone using this advanced machine while others, who were earlier manually making the gems, have abandoned the trade. Most of them have now become gem dealers and are importing finished Chinese gemstones and selling them to jewellers in various parts of the country.
Several are interested in making a comeback to Tiruchy stone manufacturing, but the Chinese have proved to be formidable competitors, given the government support they receive.
"The Chinese government is giving various concessions to the industry. Chinese manufacturers can even pledge the gem manufacturing machine as collateral for a bank loan. Our manufacturers have to pay 28 per cent tax to the government and use other assets as collateral for loans. This industry needs more government support. Otherwise, the current situation will only benefit other countries and they will take advantage of the potential of our jewellery market," said MR Venugopal, president, All India Synthetic Gems Manufacturers and Dealers Association.
The huge expenses involved to achieve Geographical Indication (GI) for the Tiruchy synthetic stone has deterred manufacturers from opting for the prestigious tag. Yet, most of those interested in making a comeback to manufacturing Tiruchy stone are confident the industry's potential has not died out.
"We showcased Tiruchy stone in a recent meeting of the Tamil Nadu Jewellery Association and Wholesale Manufacturers held in Tiruchy. Most of the merchants are interested in Tiruchy stone. The only issue is we are unable to bring down prices of the stone to compete with China. However, if we get government support like tax exemptions and loan assistance, around 20 manufactures would import the machines to resume production," said Venugopal.