In response to concerns from the gems and jewellery industry, the Indian government has decided to put on hold the newly revised norms for permissible wastage amounts in the export of gold, silver, and platinum jewellery until July 31, 2024. This decision came just a day after the initial notification, as industry stakeholders raised significant issues with the new standards.
Immediate Reaction
On Monday, the government had notified revised norms that tightened the permissible wastage limits and established new standard input-output norms for gold and silver jewellery exports. However, the industry quickly expressed that these changes were implemented without prior consultation, leading to widespread apprehension.
Official Response
The Directorate General of Foreign Trade (DGFT) acknowledged the industry’s concerns on Tuesday, following representations from the Gem and Jewellery Export Promotion Council (GJEPC). The DGFT announced that the new norms would be suspended until July 31, allowing the industry to submit feedback and data on the implications of these changes.
Suspension and Interim Measures
The DGFT issued a public notice on Tuesday, placing the May 27 norms in abeyance. During the interim period, the previously existing wastage norms will be reinstated. The DGFT has invited the industry and the GJEPC to provide detailed information and data within one month to aid the norms committee in re-evaluating the standards.
Previous Consultations
Despite the industry’s claim of insufficient consultation, the DGFT mentioned that discussions had occurred on March 5 and 21 of this year. Nevertheless, the swift implementation of the new norms without further dialogue led to the current suspension.
Stringent Wastage Limits
The revised norms significantly reduced the permissible wastage for various types of jewellery. For plain gold and platinum jewellery, the wastage limit was lowered from 2.5% to 0.5%. For studded jewellery, it was reduced from 5% to 0.75%, and for medals and coins, from 0.2% to 0.1%. These drastic reductions prompted the industry’s concern that such stringent limits could adversely affect export volumes and operational efficiency.
Industry Feedback
Industry representatives highlighted that the revised norms could disrupt the manufacturing workflow and increase production costs. They suggested that the DGFT should commission a study involving top exporters to determine realistic wastage limits.
Standard Input-Output Norms
In addition to wastage limits, the government introduced standard input-output norms (SION) for jewellery exports. These norms define the amount of input required to manufacture a unit of output, aiming to streamline and standardize the export process across various sectors, including electronics, engineering, and food products.
Balancing Efficiency and Practicality
While some experts argue that stricter norms could drive better manufacturing practices and reduce wastage, others caution that the increased production costs could outweigh the benefits. The government’s decision to halt the new norms reflects a need to balance efficiency improvements with the practical realities of the industry.
The temporary suspension of the new wastage norms for jewellery exports illustrates the government’s responsiveness to industry concerns. By providing an opportunity for further consultation and data submission, the DGFT aims to develop more balanced and feasible standards that support both regulatory objectives and industry viability.