India’s gem and jewellery industry is optimistic about the proposed India-UK free trade agreement (FTA). According to the Gem & Jewellery Export Promotion Council (GJEPC), the deal could open up better market access, boost exports, and enhance trade relations with the UK.

The agreement is expected to help double India’s jewellery exports to the UK to $1 billion within a year of implementation.

Sabyasachi Ray, Executive Director of GJEPC, stated the current trade dynamics, stating, “India imports $2.6 billion of say, gold, silver, platinum, and we export around $941 million, around a billion dollars, of jewellery and the molten silver and gemstone and finished diamonds. If you look at this sector, we import the raw materials and we export the finished goods. So that way this India-UK FTA will go a long way into seeing that we get a very good foothold into the UK market.”

The reduction in import duties on Indian jewellery is a key factor driving this optimism. While the duty range of 2% to 4% might seem modest, Ray stated its significant impact on pricing.

“In jewellery, 2% is huge so that way it will have a price advantage.” This price advantage is expected to make Indian jewellery more attractive to UK consumers.”

The UK presents a substantial market for jewellery, with annual imports valued at around $3 billion. Currently, India's share in this market is approximately $400 million, representing about 15%.

With the FTA in place, the GJEPC anticipates a significant surge in exports. Ray expressed confidence, saying, “After signing of this FTA, it will take some time to implement after that, within a year, we are looking at some $1 billion - so at least doubling this export is whatever we are looking.”

Furthermore, he noted that the overall trade could also see a significant boost. If the FTA includes benefits for importing materials like silver—much of which India sources from the UK—then both imports and exports are likely to grow, leading to mutual gains for both countries.

Courtesy: CNBC TV 18