Silver jewellery exports may lose duty-free status in US

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New Delhi, Nov 19 : loss of such benefits along with the increase in input costs and slowdown in demand in the US would result in major job losses in that industry in India, official sources told FE.

In the April-September period this fiscal, the gem and jewelry industry as a whole registered a 16.74% growth to $11.03 billion, while the imports of such products grew by 31.58% to $11.66 billion during the corresponding period last fiscal.

Last fiscal, the sector’s exports grew by just 9% in dollar terms to $20.8 billion. But this was a significant 12.7% of the total exports worth $163 billion. More importantly, the sector provides employment to around 10 million workers. Of the total exports from the sector, 35% goes to the US.

Two years ago, the US had withdrawn similar GSP benefits to gold from after exports of that item touched $2.21 billion under the GSP programme. Gold jewelry was included in the GSP programme in 2001. Though several representations were made by the Indian government and industry before the US authorities, the US has not yet recondered its decision.

According to the US government, India with $3.4 billion worth exports under the GSP program in the January-August 2007 period, is the leading country supplying 16.4% of all GSP exports. Shipments from India under GSP accounted for 22% of the country’s total exports to the US.

Gold jewelry exports were worth over 32% (or $1.1 billion) of India’s GSP exports.

The US has already rejected the applications by Export Promotion Council (EPC) for Handicrafts to add certain vanity bags, handbags and hand made lace, hats and headgear items in the GSP.

The US had also rejected the handloom EPC’s request to add to the GSP hand-loomed carpets, textile-floor covering items, terry toweling items, shawls, scarves, mufflers, gloves, mittens, bed linen, table linen, toilet linen and kitchen linen items, curtains, interior blinds, furnishing articles, floor cloths, dishcloths & similar cleaning cloths of textile materials.

Losing the sheen

• Under its generalised system of preferences programme, which was created in 1974, the US gives duty-free entry for products from developing countries such as India to promote economic growth in those countries and improve bilateral trade with the US