India’s gems and jewellery industry will get a significant boost in the American market with the US ending the preferential economic treaty with Hong Kong, GJEPC said on Friday. Without going into the nuances of the move, I feel this move will possibly create opportunities for India in gems and jewellery trade,” Gem and Jewellery Export Promotion Council (GJEPC) Chairman Colin Shah said.
He said that for the US, Hong Kong and China are the fourth largest importing destinations of gems and jewellery after India, France and Italy. Hong Kong and China exported gems and jewellery worth USD 980.85 million and USD 2.63 billion, respectively to the US in 2019. Shah said ending of the preferential treaty with Hong Kong as per the new order would open new business avenues for India.
The manufacturing facilities could shift to India from China after this move, he added. India possesses the natural benefit of ready availability of raw material, manpower and skill sets, a sector with 5 million workforce and a ready infrastructure to cater to the global demand. Indian gems and jewellery sector has an opportunity ahead to take a quantum leap to become the global leader and a trading hub in gems and jewellery,” Shah said.
On July 15, US President Donald Trump signed an executive order to end the preferential economic treatment for Hong Kong after China imposed a controversial national security law in the Asian trading hub to curb autonomy and democratic freedoms.
According to Shah, the move means the goods exported from Hong Kong will now be considered as goods made in China for duty purpose. However, he added that Hong Kong and China are also important destinations for India’s gems and jewellery exports.
Many Indian diamond and jewellery companies have their offices in Hong Kong and the move is likely to impact their businesses too, he said. According to GJEPC, India exported gems and jewellery worth USD 10.48 billion in 2018-19 and USD 9.17 billion in 2019-20 to the US, which is 26 per cent of the overall gems and jewellery exports from India. “Thus the US shares a larger pie for the gems and jewellery consumption from India,” he added.