Over supply of GEMS continues

DTC might not meet its sales targets this year.

Post By : Diamond World News Service On 18 October 2006 12:00 AM
Kamal Nath, Union Commerce Minister of India, announce the annual supplement of Foreign Trade Policy on April 7, 2006. The supplement stresses on employment generating industries like textiles, toys, leather, gems and jewellery, sports goods in accordance with the suggestions made by Board of Trade. Board had suggested measures to boost exports, including exemptions of all taxes and levies. Led by Kumaramangalam Birla, the Board considered the 4% countervailing duty proposed in budget as a stumbling block for exporters. India said on Friday that it was aiming for 20% growth in exports in 2006/07 as demand from traditional and new markets increased but analysts said it would have to step up infrastructure improvements to reach its goal. %% Stronger exports have boosted the governments confidence that India can double its share in global trade from just 1% by 2009, although it falls far short of rival China, which had exports worth $55 billion in February alone. "We have seen the trade winds changing. The centre of gravity of trade has shifted from the Atlantic Ocean to the Indian Ocean," Nath said. Nath announced incentives for the gems and jewellery trade, auto components and aviation to enable India to win market share from other Asian countries. "The foreign trade policy has been export centric," said Sanjay Budhia, a trade official at the Confederation of Indian Industry. "The kind of buoyancy we are witnessing in manufacturing its not surprising that we will achieve 20% growth in exports."
The Foreign Trade Policy, Nath pointed, would facilitate the export of value-added products and cater to the changing needs of the market. The policy will also assist in easing product movement across borders and allow import of precious metal scrap for refining, he remarked, adding that there are a number of unutilised gems and jewellery manufacturing units, which need to be revived. Gem and jewellery exporters will now be allowed to export cut and polished stones for value-enhancing treatments, provided the stones are re-imported within a period of 120 days. %% The new measures include allowing the import of precious metal scrap and used jewellery for melting, refining and re-export. The minister also proposed a reduction in the value-addition norm on exports of gold and silver jewellery from 7% to 4.5% in view of the increase of gold and silver prices in the international market. The sharp rise, in recent times, had made the present value-addition norms unrealistic, Nath pointed.
In the previous 2005-06 fiscal, India’s merchandise exports went past the $100 billion mark to reach $101 billion. Nath said that India’s exports soared by 60% from $63 billion two years ago, calling it a ‘grand leap forward’. Imports, however, touched $140 billion in the same period, up 32% compared to the previous fiscal year.

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