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Jewellery exporters suffer from poor gold supply in South

CHENNAI: The Gem & Jewellery Export Promotion Council (GJEPC) pointed out that there is a severe problem with regard to supply of gold in the South. As a result, nominated agencies are not in a position to cater to exports and they concentrate only on the domestic business, it said.

Addressing a press conference here on Friday, Sanjay Kothari, Chairman, GJEPC, said there were inadequate gold supplies in Hyderabad and Kerala.

The other gold supplying agency, Bank of Nova Scotia, operated only in two schemes (outright and loan) and it would take at least one year to open an account with the bank.

Mr. Kothari said MMTC/SBI did not have operations in Coimbatore, Bangalore, Hyderabad and Kochi. They, however, operated only in Chennai for select exporters. He said both MMTC in Chennai and Bank of Nova Scotia needed more supplies to cater to export needs. Small exporters had no option of getting the raw material at all.

He wanted the Kerala Government to reduce the four per cent VAT on gold. It was the only State that had imposed such a huge VAT on gold exporters, he added. As a result, exports from Kerala were negligible.

Mr. Kothari also urged the State governments in the South to provide land for setting up a well-equipped international Gem and Jewellery Training Institute in Chennai, which would enable artisans to upgrade themselves with latest designs. It will open up more avenues for employment generation, export growth, and improving the living conditions of the artisans in Tamil Nadu.

Mr. Kothari pointed out that import of raw materials such as rough diamonds was declining as the African countries were setting up their own manufacturing companies. He urged the Centre to identify mines so that India would not feel the pressure in future.

The Centre, he said, had identified two mines in Madhya Pradesh and Kerala. Export of cut and polished diamonds grew to $14.2 billion in 2007-08 from $10.9 billion in 2006-07, gold jewellery by 8 per cent to $5.6 billion from $5.2 billion and coloured gemstones and others to $276.42 million from $246.4 million.

Exports of cut and polished diamonds from southern India are $102.1 million in 2007-08 ($42.08 million), while that of gold jewellery fell by 17.4 per cent. Total exports from the South were $1.458 billion in 2007-08, a drop of 10.7 per cent over the previous year.

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