In the third quarter of the current fiscal, the gold demand of India fell by 24% after seeing growth in last nine months.
As the demand is going down, so to reduce the import duty on the yellow metal, jewellery sector has requested the government. In October 2017, the gold imported by the country has reduced by 16% in value terms and in the same month, last year reached $2.94 billion from $3.5 billion.
As per Gem & Jewellery Export Promotion Council (GJEPC), to help the jewellery sector, there is a need to reduce the import tax on gold from the present 10% rate to 4%-5%. Because of the introduction of GST and 5% import tax by UAE, fall in global demand, the exports have also come down. In the current fiscal, India’s gold imports may reach 700 tonnes and gold exports $43 billion, as per GJEPC.
For boosting export and creating jobs in this sector, the centre is working with inputs from gems and jewellery industry to create a package, recently said by the minister of Commerce and Industry, Suresh Prabhu. For promotion and growth of the sector, GJEPC has been asked by the ministry to create a proper business plan.
In the world, India is the second largest jewellery market. The Indian gold is seeing a fall in imports, exports, and earnings because of a decline in demand. In the July–September 2017, the gold demand of the country has dropped by 24% to 145.9 tonnes 192.8 tonnes in the same period in last year, shown by a report made by World Gold Council. Due to anti-money laundering initiatives and the imposition of GST, the demand is low, said by WGS. The demand for gold in the year is estimated to be around 650-750 tonnes and the fall will continue.
Due to an increase in population, income levels, gold price movement, and more such factors, some other analysts feel that the demand for gold will increase.
GJEPC hopes that technology up gradation will be supported by the Finance Ministry and set up of gems and jewellery parks in the country. To streamline labour in this sector, they also hope the introduction of some rules.