The government on Tuesday hiked customs duty on jewellery from 10% to 15%, widening its net to curb import of the yellow metal.
The latest move was meant to protect the local industry as there was no difference between the customs duty on gold, silver and jewellery. "Jewellery-making is a labour-intensive industry. Millions of artisans are dependent on this sector for their livelihood. In the absence of any duty differential between articles of jewellery and primary metal, which was 8% in the case of gold jewellery and 4% in the case of silver jewellery in January 2012, there is an apprehension that Indian jewellery makers would not be able to compete with cheaper imports, particularly when majority of the imported jewellery is machine-made as compared to handmade jewellery in India.
To protect interests of small artisans, customs duty on articles of jewellery and of goldsmiths' or silversmiths' wares and parts thereof is being increased from 10% to 15%," the finance ministry said. The government has increased the import duty on the gold from around 1% at the start of 2012 to discourage imports and manage the current account deficit, which was estimated at a record 4.8% of GDP in in 2012-13.
Jewellery imports are a fraction of gold imports. During 2012-13, jewellery imports were estimated at almost $5 billion, while gold import was valued at almost $56 billion. The Economic Advisory Council to PM has projected that the inflows would decline to around $40 billion during the current financial year as the government has put in place a number of checks.
Source:- timesofindia.indiatimes.com
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