The Gem & Jewellery Export Promotion Council (GJEPC) has strongly criticized the recent hike in gold import duty, stating that the move will not curb imports but will instead inflate prices and severely hurt the jewellery trade. The council urged the government to engage in dialogue with industry stakeholders to find sustainable solutions.
Industry Reaction to Gold Duty Hike
In a formal statement, the GJEPC emphasized that increasing the import duty on gold is an ineffective measure to control the country's gold imports. According to the council, such a policy only leads to higher prices for consumers and creates challenges for the entire gems and jewellery sector. The industry body highlighted that the duty hike will primarily benefit illegal channels and smugglers, as legitimate businesses struggle to compete.
Impact on the Jewellery Trade
The gems and jewellery sector, which employs millions of skilled artisans and contributes significantly to India's export earnings, is expected to face a sharp decline in business activity. Small and medium-sized enterprises, which form the backbone of the industry, will be particularly affected. The higher cost of gold will reduce consumer demand, leading to lower sales and potential job losses. Additionally, the increased duty will make Indian jewellery less competitive in international markets, hurting exports.
Call for Government Dialogue
The GJEPC has urged the government to reconsider the duty hike and instead adopt a consultative approach. The council proposed that the government work with industry representatives to develop policies that effectively address concerns about gold imports without harming the trade. Sustainable solutions, such as promoting recycling of gold and encouraging transparency in the supply chain, were suggested as alternatives to duty increases.
The council also noted that India is one of the world's largest consumers of gold, and any policy change has far-reaching implications for the global gold market. A balanced approach that protects the interests of both the industry and the economy is essential.
In conclusion, the gems and jewellery bodies have made it clear that the gold import duty hike is counterproductive. They call for immediate government intervention to prevent further damage to the trade and to ensure that gold prices remain stable for consumers.
