India's gold jewellery exports through SEZs declined nearly 30%: GJEPC

NEW DELHI (Scrap Monster): The data compiled by the Gems and Jewellery Export Promotion Council (GJEPC) suggests huge drop in gold jewellery exports through the country’s Special Economic Zones (SEZs).

According to GJEPC data, the shipment of gold jewellery from SEZs slumped by 28.78% to Rs 4,702.02 crores during the first quarter (April to June ’14) of the current fiscal year. The gold jewellery exports through SEZs had totaled Rs. 6,602.53 crores during the corresponding quarter last year.

The Council data indicates that SEZs have lost major share of the export business to Domestic Tariff Areas (DTAs). The gold jewellery exports from DTAs soared higher by 173% to Rs. 6,973.95 crores during Q1 this fiscal year. This is in comparison with Rs. 2,553.38 crores of exports recorded during the corresponding quarter a year before.

The shift in business from SEZs to DTAs is primarily due to the prevailing 80:20 rule. As per the rule, four times of jewellery export must be made available for domestic sale. Since jewellery manufactures in SEZs attract 15% duty on sale to DTAs, jewellers prefer to execute all trades from DTAs. This has resulted in unprecedented decline in exports through SEZs, GJEPC noted. The Council also requested to the government to relax the 80:20 rule in order to prevent SEZ business from falling further.