With the USA revoking the preferential trade status of Hong Kong earlier this month, India sees brighter future for its gems and jewellery s, a senior jewellery export council official said on Friday.
Gems and Jewellery Export Promotion Council (GJEPC)officials said with China imposing the national security law on Hong Kong, the USA has given indication of raising duty on goods from there to 7.5 per cent from 3.3 per cent.
Without going into the nuances of the US move, I feel it will possibly create opportunities for India in gems and jewellery trade," GJEPC chairman Colin Shah told PTI. For USA, Hong Kong and China are the fourth largest destinations for importing gems and jewellery after India, France and Italy.
Hong Kong and China exported gem and jewellery worth USD 980.85 million and USD 2622.19 million respectively to the US in 2019. "The ending of the preferential treaty as per the new order with HK would open new business avenues for India. The manufacturing business has the potential to witness a shift to India from China," Shah said.
"India possesses the natural benefit of ready availability of raw material, manpower and skill sets, a sector with 5 million workforce … It (end of preferential trade status for Hong Kong) is an opportunity to take aquantum leap to become the global leader and a trading hub in the gems and jewellery," Shah said.
However, the mathematics of benefit for gems and jewellery trade for India may not be as simple as Hong Kong and China are also important destinations and nearly 27 per cent of exports are directed to that market which contains diamonds and gemstones which are used as raw materials for studded jewellery exports to the US. Many diamond and jewellery companies of India have their offices in Hong Kong and the US move is likely to impact their businesses too.
According to GJEPC, India has exported gem and jewellery worth USD 10.48 billion in 2018-19 and USD 9.17 billion in 2019-20 to the USA, which is 26 per cent of overall gems and jewellery exports from India. Thus US shares a larger pie for the gems and jewellery consumption from India.