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India Gold and Jewellery Summit 2018 – Highlights

The 2nd edition of India Gold and Jewellery Summit 2018 was held in New Delhi between 23 and 24 November 2018. The conference was organised by Gem and Jewellery Export Promotion Council of India (GJEPC) with the support of World Gold Council. Conference highlight is presented below.

Mr. Pramod Kr. Agrawal, Chairman, GJEPC delivered the welcome address and thanked the government of India for its proactive ness, support and guidance to the industry towards making India the jewellery hub of the World.

Delivering the keynote Shri Suresh Prabhuji, Honourable Minister for Commerce and Industry and Civil Aviation, Government of India outlined the priorities of the Government. These include (a) Making the imports of gold and subsequent consumption better through an integrated gold policy; (b) Up scaling and upgrading the existing gold refineries and jewellery manufacturing units with quality improvement as a mandatory component; (c) Targeted initiatives to develop a pool of skilled manpower(of at least 200,000 in the next five years);(d) establishing partnerships with other countries through win-win collaborations; and (e ) finally, increasing the quantum and quality of gold jewellery exports from India to the rest of the world. The commerce ministry has already initiated steps to set up the Domestic Council to work on all these aspects and ensure seamless coordination between government and the industry. Responding to the request of reduction in customs duty on gold imports, the minister said while the case deserves a consideration, reduction would largely depend on the performance of overall economy.

Mr. Aram Shishmanian, CEO, World Gold Council, delivered the special address. Outlining the key global changes, he said, “Central Bank purchases so far in 2018 have increased by 40%. Reserve Bank of India has purchased 20 tons so far during the year. This increasingly points to a multi-currency system with Chinese Yuan (RMB) taking a lead role. The pre-eminence of London is also getting challenged, as Asia emerges as the largest production and consumption centre for gold. “Environmental, Societal and Governance” (ESG) criteria increasingly demand provenance of gold and finally, Fintech is disrupting the industry in a remarkable way”. Commenting on India, he said, “India is moving from “Talk to Action” mode on gold with the government taking leadership in bringing out a comprehensive gold policy, moving towards creation of a spot gold exchange and reclassifying gold as a valuable asset class.” In his closing remarks, Mr. Shishmanianurged the industry to continue the leadership, stay together, work as one unit, take responsibility and pursue long-term goals with the government.

Dr Anup Wadhawan, Commerce Secretary, Ministry of Commerce, Government of India commenced his address by stating that gold and jewellery industry contributes 7% of India’s GDP, 13.5% of India’s exports and employ five million people directly. He said the ministry is working on all aspects of ‘ease of doing business’ and is in constant consultation with the ministry of finance on duties and taxes. He appealed to the industry to take leadership in making the members accountable for their actions and proposed creation of a ‘self-regulatory mechanism’ to ensure sustainability.

Industry appeal to the government:

n  Guidance from government on timeline for implementation of various programmes outlined in the Niti Aayog report

n  Clarity on the next steps in the formation of new bodies / institutions such as Gold Board, Domestic Council and Spot Gold Exchange

n  Reduction in customs duty on gold imports to a level where illegal business will not thrive

n  Reduction in GST on gold jewellery to a level that would encourage voluntary compliance

n  Resolution of some of the issues in SEZs that are hindering exports.

n  Implementation of GMS through jewellers

n  Technology-upgradation fund for jewellery sector

 

The first technical session explored the policy aspects especially around the implementation of Niti Aayog. Experts commended government initiative and expressed their full support in implementation of the recommendations of Niti Aayog report. There were also calls for industry leadership for new initiatives within the current framework.

Technology and Innovation in jewellery manufacturing was the next session. IBM shared an idea on how artificial intelligence can increase customer experience and create new opportunities in B to C segment. Likewise, Imaginarium gave a glimpse into the future of customised manufacturing using currently available technologies. Phonepe and Digital Gold provided a mechanism to make gold accessible and appealing to the millennials as an investment preposition. Tanishq presented a video on how safe and scientific working environment and training can help build trust and productivity of karigars. Mr. Srinivasan of Emerald appealed to the delegates to “avoid fighting on price” and instead “compete on quality and design”. IIT Bombay welcomed the industry to the institute to explore collaboration opportunities possible.

A special presentation by Mr. Harish Bijoor, dispelled the myth that gold jewellery, as it is sold today, is a ‘luxury’ and set the audience thinking on the possibilities in ‘branding’ and creating unique customer experiences.

The session on standards brought out global perspective (from World Gold Council and London Bullion Market Association) and updates from India on responsible sourcing guidance and compulsory hallmarking standards. There were intense discussion on the issue of accountability of a jeweller and the hallmarking agency when it comes to final product quality that has been hallmarked.

Day-2 started with a keynote by Mr. Yaduvendra Mathur, Additional Secretary, Niti Aayog on the making of the report. He is hopeful that government will soon come out with the next course of action on the implementation, which was very optimistic.

The next session on Employment generation and skill development, various initiatives and programmes proposed by Gem and Jewellery Skill Development Council were elaborated by Mr. Sanjay Kothari, Chairman, GJSCI. MMTC PAMP shared the details on the Precious Metals Assay Institute. National Centre for Applied Economic Research outlined the details of the on-going study on Cluster Mapping and sought industry participation in the initiative.

The third session on GST, Taxation and Enforcement, the government officials from Ministry of Finance shared the efforts taken by the department to stop smuggled gold from coming into the country and sought industry cooperation in enhancing enforcement. The session also saw experts articulating on pending issues in GST transition, clarifying on the taxation rate applicable on “job work” and benefits of joining “mykycbank”. Here again, delegate appealed for lowering both customs duty and GST to incentivise legitimate businesses.

The last session before the open house (choupal) was thought provoking as the moderator Mr. Rajesh Khosla attempted to clarify that we already have well-established bullion banking in India doing metal accounting and we should attempt to build a bullion clearing infrastructure over that to complete the process and offer several innovative solutions. He strongly urged the industry to take leadership in standard setting and move forward.

In summary, Government of India is keen on transforming the gold industry. It hopes to create two million additional jobs and push overall gem and jewellery exports to USD 75 billion by 2025 with the support of the industry. As rightly put by Mr. Aram, India has moved into the action phase when it comes to implementing gold policy. It remains to be seen how it takes everyone along in the process and achieves its goal.

“US Dollar Index, 10-year US treasury yields, implied volatility in stock and currency markets and fundamental supply and demand for gold are the macro factors that influence the global gold markets” Mr. John Reade, Chief Market Strategist, World Gold Council

 

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