Indian Jeweller (IJ) June - July 2020

Policy & Market UPdate
Policy & Market UPdate
Govt. increases duty
drawback on gold by 16%;
and reduces silver by 5%
india to
benefit from
U.S.-china
trade war
President’s executive order
ending Hong Kong’s
preferential economic treaty
under U.S. law effectively ends
the territory’s separate customs
treatment from China. Which
means, the goods exported from
Hong Kong will now be considered
as goods made in China for duty
purpose.
Colin Shah, Chairman GJEPC said,
“India possesses natural benefit of
ready availability of raw material,
manpower and skill sets, a sector
with 5 million workforce and a ready
infrastructure to cater to the global
demand. Indian gems& jewellery
sector has an opportunity ahead to
take a quantum leap to become the
global leader and a trading hub in
the gems and jewellery.”
Gold price hits all-time high
Gold prices in India hit a record high on July
22, tracking a global rally, as expectations of
more stimulus to resuscitate pandemic-hit
economies lifted the metal’s appeal as an inflationhedge.
Domestic gold futures reached an all-time
high above the Rs 50,000 mark in early trade, taking
their gains to 28 per cent in 2020 after rising a
quarter in 2019. However, the price rise dampened
retail demand for gold in the country, which is the
world’s second largest consumer of the precious
metal.
Gem, jewellery exports dip
34.72% in June
The country’s gem and jewellery exports
contracted by 34.72 per cent to USD 1.64 billion
(around Rs 12,333 crore) due to dip in global
demand on account of the COVID-19 pandemic. The
exports stood at USD 2.52 billion (around Rs 18,951
crore) in June last year.
“There has
been a steady
decline in exports
as the demand
has been going
down following
global economic
slowdown and
several restrictions in many countries to curb the
spread of Covid-19 pandemic. However, we are
seeing demand picking up in China, Europe and
Australia,” GJEPC chairman Colin Shah told press
persons.
The duty drawback rate on gold has been
increased by 15.6 per cent from Rs.372.9 per gm
to Rs.431.1 per gm, which will enable exporters
to get higher returns on duty and taxes that were paid
for the raw materials against the exported products.
Meanwhile, the duty
drawback on silver jewellery
has been reduced by 5 per
cent from Rs.4,332.2 per kg to
Rs.4,105.6 per kg.
The previous revision in the
gold duty drawback rate was
done on 28th January, 2020, following which the gold
price has risen steadily. The GJEPC represented the
matter to the Department of Revenue and urged it to
revise the drawback rates.
India’s Q2 Gold Jewellery
Demand Falls 74%
Indian Q2 jewellery demand fell 74 per cent year-onyear
to 44 tonnes -- the lowest quarterly total due
to the nationwide lockdown, lost festival demand
and the higher gold price, according to the World Gold
Council’s (WGC’s) latest Gold Demand Trends report.
India’s H1 jewellery demand
was down 60 per cent to an
all-time low of 117.8 tonnes.
The WGC report noted that
the strict lockdown imposed
in late March ran through until
mid-May, encompassing the
all-important gold buying festival of Akshaya Tritiya
– one of the most auspicious days for buying gold in
India. This year, however, the country-wide lockdown
meant that physical store sales were not possible, and
only those retailers with an online presence were able
to cater to demand. Sales were trivial in comparison
with the previous year, it added.
New rules
for electronic
retailers come
into effect
The new rules for electronic
retailers, including mandatory
display of ‘country of origin’
on their products, will come into
force by the end of this week, Union
minister Ram Vilas Paswan said on
July 20 and emphasised that the
entities will face penal action for
any non-compliance.
The ‘Consumer Protection
(E-Commerce) Rules, 2020’ will be
applicable to all electronic retailers
(e-tailers) registered in India or abroad
but offering goods and services to
Indian consumers, he said.
“Most rules framed under the
Consumer Protection Act 2019
have come into force from July 20.
The e-commerce rules are
“mandatory in nature” and violation
of these will attract penalties.
64 | june-july 2020 | INDIAN JEWELLER
INDIAN JEWELLER | june-july 2020 | 65