In an exclusive interview with The Financial Express, Praveen Shankar Pandya, chairman of Gem and Jewellery Export Promotion Council (GJEPC), an organisation sponsored by the ministry of commerce, said that policies must be more liberal and pragmatic. Pandya feels that even though the government has liberalised its gold policy, it still need to be freed further to give a major thrust to exports.
Excerpts:

On the activities of the Gem and Jewellery Export Promotion Council (GJEPC)

The Council is an apex body set up by the ministry of commerce to felicitate the exports of precious and semi-precious stones, diamonds and jewellery. The Council coordinates with the government and influencepolicy modifications to help trade, apart from other promotional activities like organising exhibitions and seminars both within the country and without.

The Council also interacts with the raw-material suppliers, especially major mining countries of the world, on the behalf of its members and has a working committee that is elected by the trade to look after its operations. The committee consists of various panels such as the diamond, colour stone, silver, pearl, among others.

On the promotional activities of the Council

Participation in international jewellery exhibitions is one major promotional strategy of the council. Recently, GJEPC organised an Indian pavilion at Basle '99, in Switzerland, which was one of the leading jewellery exhibitions in the world. A group of nine exporters participated in the fair, which effectively show-cased India's capabilities in jewellery designing and manufacturing. A record business of about Rs 10 crore was generated from the jewellery section and Rs fourcrore from the watch section for the sub-continent.

Besides, the Council also conducts seminars on technical and non-technical training facilities available in the country. The main focus of the non-technical seminars would be to inculcate interest and enthusiasm among the younger generation about the various facets of the industry and emphasise that there is tremendous potential for making a profitable career in this sector.

On the ongoing India International Jewellery Show '99 (IIJS '99)

This is the 16th India International Jewellery Show '99 (IIJS). The three-day show beginning Saturday (June 19) is at the World Trade Centre in Mumbai. The event is likely to be the largest and foremost show of the jewellery industry in the country. Over 10,000 visitors, from India and abroad are expected to visit this show.

The exhibits would include plain gold jewellery, jewellery studded with diamonds, coloured stones, pearls, apart from silver jewellery and other related articles. The exhibition wouldalso have a separate section for gem and jewellery machinery.

On the Jewellery Product Development Centre of the Council

The Jewellery Product Development Centre (JPDC) of the Council, is a premier institute under the aegis of GJEPC set up in 1985 to provide professional training in jewellery manufacturing and designing in the country. Even though, JPDC started with just one course to begin with, it can now boast of a wide range of courses and the faculty, comprising experts from world. On the sourcing of roughs for the diamond sector

India, at present, is the single largest manufacturer of diamonds in the world, producing more than 50 per cent of diamonds by value and 90 per cent by volume.

So the Indian diamond industry is dependent on all the major producers in the world.

Even though, we have diamond mines in the country, the supply from these are not really sufficient enough to meet the demands of the industry.

So, roughs are sourced from all over the world for exampleAustralia, Russia, South African countries, Belgium markets and of late Canada. All these roughs are marketed either through DeBeers or Argyle, and we purchase it from the international markets. Because of the emergence of new merchants in the international markets, it has become very competitive, resulting in the industry being the gainer.

On price fluctuations in the global markets that is effecting domestic gold and jewellery sectors

The price fluctuations in the international markets have a drastic impact on the industry, especially on the manufacturers. Mostly, the producer gets the money only on the day of shipment. The manufacturer is forced to speculate always, resulting in a risk factor. The speculation, results in a net gain or loss, which has to be borne by the manufacturer.

On the demand for a more liberalised policy

At present, the industry's demand is for a more liberalised gold policy, even though the policy has been freed to a great extent in the last two years. The need ofthe hour is to induct more foreign players into Indian markets to bring about a healthy competition. Gold should be made available to manufacturers on lease at a nominal rate, as is provided to most of our overseas competitors, where the payment is made only at the time shipment.

Earlier, there was only the State Bank of India (SBI) leasing gold to manufacturers, but a healthy competition is being witnessed by the industry with more and more foreign banks coming into the picture. I think this trend also should be encouraged.

On the impediments hampering growth of jewellery

It was only after 1990, when the Gold Control Act was abolished, India could make its presence in jewellery manufacturing know to the world markets. Till that time, the country never exported jewellery. Before the Act was abolished, no manufacturer was allowed to hold prime gold. Without prime gold it is difficult to make jewelleries. So the entire market of gold and jewelleries went to Hong Kong and Bangkok.

After thescrapping of the Act, the industry grew and exports of gold and related jewelleries touched $850 million annually. The industry needs a gold policy which will felicitate exports. At present, the regulations are so stringent that an exporter needs to employ a team of auditors to maintain records and look into rules and regulations governing gold exports.

If the policies are practical and pragmatic, then the industry would be able to export jewellery worth $three million every year.