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

Bullion World | Volume 2 | Issue 11 | November 2022

2. Strong Competition from as well as domestic markets. Also, 7. Low Ease of Doing Business
Other Countries they avail incentives like fast-track The SEZs suffer from certain
SEZ units in India are facing patenting, common user facilities, problems which undermine the
increasing competition from gems single-window fast track clearances ease of doing business. Redundant
and jewellery units in other countries in many global SEZs, which firms procedures, duplication of
like China and Turkey, in terms of in India do not get. Logistics costs paperwork, cumbersome tax filing
price, quality and designs. Turkey is also much higher in India, with process and difficulty in receiving
is gradually taking over in light many restrictions on carrying gems Hallmark Unique Identification
weight gold jewellery segment. and jewellery through the express (HUID) number are some problems
The competition is due to a mix of cargo mode. After the survey, the faced by the SEZ units. There is
technology and innovation, better government is now trying to ease this a lack of integration of SEZ online
utilization of existing resource and restriction on the express mode. system with ICEGATE leading to
ability to offer competitive prices, inefficiencies in the SEZs. Some SEZ
lower cost of production and policies 5. SEZs versus FTA and DTA units pointed the complicated exit
such as allowing reverse job work, Issues process in the SEZs which involves
allowing an efficient utilization of The SEZs are given the benefit of approval from multiple authorities at
labour and equipment. Reverse job zero duty imports but with signing the Centre and state levels making
work policy in such countries also of the trade agreements, imports it lengthy vis-à-vis other countries
led to scale expansion. from FTA partner countries can also such as Philippines and Indonesia.
be at zero duty. At the same time,
3. Seasonality of Exports units in Indian SEZs face high input 8. Impact of Covid-19
Due to the seasonality in the costs linked to high logistics costs pandemic and Other Issues
demand in the export market, the and cost of inputs like electricity. The gems and jewellery sector
labour and equipment capacity in If units in SEZs are not allowed to operates in the processing stage
SEZs is not optimally utilized. Since cater to the DTA, these units are of the value chain. The sector is
exports from SEZs is completely at a disadvantage vis-a-vis units import dependent for raw material.
dependent on cyclical global from countries with whom India has Due to the Covid-19 pandemic
demand, this seasonality hampers zero import duties and from whom and subsequent lockdown, the
SEZs prospects, particularly in the India source raw materials and final sector faced severe disruptions in
times of uncertainties emerging from products for the domestic market. At availability of raw material, logistical
global shocks such as the COVID-19 the same time, incentives are also and transport disruptions. High GST
pandemic, the Russia-Ukraine war, given to firms in DTA. The SEZ units rates, low demand and increasing
etc. do not know what kind of incentives gold rates were some issues before
will be applicable to firms in DTA, the pandemic struck. Around 79
4. Limited Non-Fiscal which can be given by the centre percent retailers observed a decline
Incentives and/or the states. For example, in domestic demand for jewellery
In general, Indian SEZs have through the forthcoming Foreign during the pandemic. Labour
much less non-fiscal incentives Trade Policy, DTA firms may get shortage also heightened during the
compared to their counterparts better fiscal incentives, than firms pandemic.
in many developing countries. As located in the SEZ.
the SEZs are not allowed to sell in Way Forward
the domestic market, their skilled 6. Limited Government led The gems and jewellery sector
permanent workforce and state-of- Skill Development and is facing a number of issues
art-facilities remain underutilised Training Programmes ranging from policy uncertainty, to
during periods of low export The survey participants pointed seasonality of exports and supply
demand. This increases the cost towards skill shortages in this sector, chain disruption to limited non-
of operation and makes Indian need for skill upgradation and fiscal incentives, limited inflow of
units less competitive compared limited government participation and FDI, limited investment in R&D,
to units from countries like China collaboration with the private sector innovation and training, etc. In view
and Turkey, which have allowed and other stakeholders in imparting of these issues, and the need to
their SEZs to cater to the foreign training for skill development. formulate a holistic policy towards

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