Page 9 - Bullion World Volume 02 Issue 11 November 2022_Neat

Bullion World | Volume 2 | Issue 11 | November 2022

Gems and jewellery units in the Indian SEZs (R&D), advanced technology and
skilling of workforce is low in the
are operating under an uncertain policy gems and jewellery units of Indian
environment vis-à-vis their counterparts in SEZs. Of the total 14 gems and
other gems and jewellery exporting countries jewellery SEZ units, only 4 reported

such as Turkey China, Philippines, Canada, to have made such investment.
etc. Some of these countries not only have Foreign Direct Investment (FDI)
lower logistics costs, but also provide more in gems and jewellery units of
Indian SEZs is negligible. There are
non-fiscal incentives like reverse job work, limited training programmes and
which has improved their firms’ global modules to upgrade skills in use of
competitiveness. modern technology and there are
issues related to lack of funding,
gaps in technical training and
quality of training. All the surveyed
SEZ units felt the need for WTO
compliant fiscal incentives. To make
the incentives WTO compliant,
incentives may be given on services
used by the units like training or
software. Since the WTO has no
discipline on subsidies in services,
Mrs Arpita Mukherjee Dr Nida Rahman Ms Eshana Mukherjee and services is a key component
Professor, ICRIER Consultant, ICRIER Research Associate, of the cost, fiscal incentives can
ICRIER
be directed towards services
used in manufacturing. Along with
Key Findings from the Pilot countries like Turkey allow reverse this, non-fiscal incentive such as
Survey job work subject to certain terms allowing the SEZ units to cater to the
The survey found that the gems and and conditions, like payment of domestic demand or DTA (reverse
jewellery units in the Indian SEZs appropriate taxes and duties. job work) will be a positive step in
are operating under an uncertain Another issue for firms in SEZ is improving the productivity, efficiency
policy environment vis-à-vis their that they export products like heavy and enhancing the ease of doing
counterparts in other gems and handcrafted gold jewellery and business in the sector (see Figure 1).
jewellery exporting countries such as cut and polished diamonds, the There will be more value addition and
Turkey, China, Philippines, Canada, export of which grew marginally, at job creation in the country and it will
etc. Some of these countries not around 1 percent and 0.7 percent, allow SEZ units to serve customers
only have lower logistics costs, respectively. However, exports of better by maintaining international
but also provide more non-fiscal new product categories such as standards in manufacturing, as
incentives like reverse job work, lab-grown diamonds picked up more skilled workers and tools and
which has improved their firms’ steam by growing at a Compound technology are available with the
global competitiveness. Reverse Annual Growth Rate (CAGR) of 48 SEZs. It will increase the profitability
job work allows the SEZ units to do percent. Thus, there is a need for of firms in SEZs.
job work for the DTA retailers and firms to move into newer products
manufacturers during the period and within each product category
when the export demand is low. like gold jewellery towards segment
This helps the firms to mitigate risk like light weight gold jewellery, which
related to seasonality of export will need technology and innovation.
demand and these firms can replace Turkey has swayed the global market
the demand for imported goods in light weight jewellery exports.
in the DTA. Given that the primary Our survey found that investment
role of the firms in SEZ is to export, in Research and Development

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