The government is weighing a proposal to relax norms to facilitate large-scale exports of gems and jewellery in packages of up to $800 each through B2C (business-to-consumer) e-commerce, official sources told FE.
Commerce and industry minister Piyush Goyal is learnt to have taken up the issue with finance minister Nirmala Sitharaman.
Currently, gems and jewellery exports via e-commerce are usually being done through the B2B mode, as B2C e-commerce in this segment is subject to stringent norms, which sharply inflate processing and compliance costs of the exporters. For instance, the cost of such a shipment from India to the US goes up to about $65 to $100, way above that of $3.5 and $5, respectively, for supplies from China and West Asia, according to an industry estimate.
Senior industry executives said the requirement of despatching gems and jewellery products in “cargo mode” (and not through courier) substantially drives up costs. Similarly, the absence of a dedicated fast-track Customs clearance mechanism for despatches and similar compliance processes for both small-value and high-value supplies make gems and jewellery exports via B2C ecommerce unviable.
Behind the stringent regulations lies the fear that unscrupulous elements may misuse such a channel to funnel black money, etc. Keeping the single despatch limit at a relatively low level of $800 addresses this apprehension, said one of the sources. As such, the average ticket size of the gems and jewellery products sold through e-commerce is well below $100, he added.
The government’s interventions, therefore, are being sought to relax procedures to bring down transaction and operational costs, expedite customs clearances, ensure an easy return policy and allow B2C e-commerce exports through courier as well. “The government can very well build in safeguards (to discourage unscrupulous elements from exploiting the system) in such a manner that it will ensure exports through this mode don’t become prohibitively costly,” said the source quoted above.
After a Covid-induced slump in FY21, India’s gems and jewellery exports jumped 71% until December this fiscal from a year before to almost $29 billion, having emerged as the third-largest export segment.
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