A 101% jump in gold jewellery exports from special economic zones (SEZs) and export processing zones (EPZs) in the first quarter of this fiscal from a year before — even when outbound shipments from domestic markets outside such designated zones plunged 31% during the period — have surprised industry executives.
The country’s gold jewellery exports from SEZs and EPZs surged to $1,596.33 million in the first quarter, compared with $792.32 million a year before, according to data sourced from the Gems and Jewellery Export Promotion Council (GJEPC). However, gold jewellery exports from domestic tariff area (DTA), or domestic markets outside such designated zones, dropped to $841.59 million during the April-June period, compared with $1217.92 million a year before.
Some jewellers suspect either foul play or a goof-up in data reporting at ports, citing not-so-robust demand overseas. A senior GJEPC official said they are looking into the matter closely to ascertain the specific reason behind the surge in recent months.
Importantly, some industry executives feel a spurt in domestic consumption, after the over 40-day strike by jewellers in March and April against the imposition of an excise duty on gold jewellery, may have dented exports.
Gold exports shine a little too bright
This is because jewellery manufacturing was adversely affected during the strike and when shops finally opened, jewellers’ inventories were mostly exhausted by domestic consumers, who had to defer purchases because of the stir. The SEZs and EPZs, however, cater to export markets only, so manufacturing and exports from such zones continued unhindered. Interestingly, gold jewellery exports from DTAs had recorded a 78% jump in 2014-15 before crashing a massive 40% in the last financial year. In stark contrast, gold jewellery exports from SEZs and EPZs saw a 33% increase in the last fiscal, having registered an almost 25% decline in 2014-15.
Buoyed by export of gold jewellery from SEZs and EPZs, India’s overall gems and jewellery exports jumped to $10,592 million in the first quarter of this fiscal, up 11.5% from a year before, far outpacing a 2.1% decline in the country’s total outbound shipments during this period.