Chennai: UAE, the top buyer of Indian gems and jewellery a few years back, is now down to the third slot while the US has returned as the top destination after a gap of more than 15 years.
Even in plain jewellery, the UAE’s share has come down to a fraction of what used to be shipped earlier.
Till FY18, the UAE has been the top destination for gems and jewellery, followed by Hong Kong. The emirate had slipped to the second position in FY18 after it rolled out value added tax for imported goods and the Indian government introduced checks on possible round-tripping in exports.
This year the US has returned to the top slot with a share of 38.7 per cent of the total gems and jewellery exports. Hong Kong has a share of 24.6 per cent while UAE’s share is down to 11.9 per cent.
Between April and December, gems and jewellery exports to the UAE witnessed the highest fall of 45.26 per cent with the slower demand for plain jewellery and studded gold jewellery.
In 2018-19, the UAE had bought $7686.60 million worth plain gold jewellery, which was 89 per cent of the total plain gold jewellery exports from India. In FY20-21 this came down to $1178.78 million, shrinking its share to 54 per cent of the total exports.
Similarly, UAE’s share in studded gold jewellery has come down from 26 per cent to 14.5 per cent in the past few years.
According to the Gems and Jewellery Export Promotion Council, the scheduled Foreign Trade Agreement (FTA) with the UAE on Friday would help the industry to take a bigger leap in exports of plain gold and gold studded jewellery, which was hit badly during the pandemic.
“The FTA between India and UAE has come at an opportune time when both countries are looking to rebound from the Covid-19 setback and recalibrate and realign their common business interests, including gold and diamonds. The UAE is a gateway to the entire Middle East region and the proposed abolition of 5 per cent import duty in the UAE would lead to increased prosperity on both sides of the Arabian Sea,” said Colin Shah, chairman, GJEPC.
“Exports to the UAE declined significantly to $1.18 billion in 2020-2021. With the proposed nil duty, we are confident that exports of plain gold jewellery and gold studded jewellery from India to the UAE would boost to $10 billion or Rs 74,000 crore in 2023,” Shah said.
