Export is a broad term, and an exporter must make several preparations before beginning an export business. Here's how to export gems from India, as well as the challenges you'll face while exporting.
Gemstones and jewellery adorned by them are an integral part of several cultures from around the world. Likewise, gemstones are treated with a lot of care and respect in India as they have been a part of our economy for centuries. Exporting Gemstones from India gained popularity around the world since ancient times and over the years our country has become a gems export centre. In fact, within India, almost 50% of the total luxury products market is cornered by jewellery adorned with precious gemstones. Since India is famous for handmade jewellery, gemstone export has become a lucrative business option in recent years. This article will focus on the export of gems from India, and the legal requirements for the same.
Gems Export from India
India was one of the first countries in the world to make fine jewellery using minerals, metals, and gemstones. As a result, over the years, India has become a gems export centre for the world, producing some of the most exquisite pieces the world has ever seen. The gemstone industry generates employment for a large section of India’s population thanks to high foreign exchange earnings via exports. Even back in 2012, jewellery and gems exported from India accounted for almost 14% of our country’s total merchandise exports. India, Thailand, the USA, and China dominate the global jewellery industry which is worth over $100 billion. In India, the gemstone and jewellery industries work mainly under the unorganised sector with local players making up almost 80% of the market.
Challenges Faced by Gemstone Exporters in India
Here’s a quick look at the challenges faced by gemstone exporters in India.
- Jewellery and gemstone polishing are difficult skills to acquire, leading to a human resource shortage
- Moreover, skill development is a long and expensive process, making the industry extremely labour intensive
- Lack of support for research and technological development within the sector
- Limited financing options due to it being a capital intensive industry
- High import dependency for certain commodities leading to unexpected delays and a rise in prices
- Additionally, limited supply infrastructure makes growth challenging
- The high impact of regulatory curbs and tariffs, leading to price fluctuations
What to Know About Gemstone Export from India
India has long been renowned as a gems export centre around the world, and even back in 1966-67, India exported gems worth $28 million to the world. However, the establishment of an export promotion council for gems and jewellery has expedited this growth, with exports in 2012 hitting a value of $42.8 billion. Further, increasing domestic demand and use of varied gemstones in jewellery led to exports growing to $43 billion by 2017, making India one of the world’s most important gem exporting nations.
Our native craftsmanship and variety have become a symbol of purity and elegance around the world. The gemstone and jewellery industry employs around 4.6 million people with the government expecting this number to grow exponentially in the coming years. Over the years, India has become the world’s largest manufacturer of cut and polished diamonds. Annually we contribute almost 80% of the world’s diamonds with regards to volume and 60% with respect to value. While centred in Surat, the diamond polishing industry has spread to other areas such as Mumbai, Kerala, and Tamil Nadu. The major importers of gem exports from India are the following nations;
- United Arab Emirates
- United States of America
- Hong Kong
- Latin America
How to Export Gemstones from India
- The entrepreneurs will first need to study the global gemstones export market and decide on what type of products they wish to export. Once they have a basic idea regarding their business plan, they must incorporate their business in India. Afterwards, entrepreneurs must open a bank account for the company and obtain a company Permanent Account Number.
- To partake in the gem exports industry in India, individuals must first register with the Director-General of Foreign Trade. Additionally, once they have registered with the DGFT, companies can apply for an Import Export Code. No company can import or export any product into or out of India without this unique 10-digit number. The process of registration is a one-time affair, but companies will need to renew their license from time to time as and when required.
- Next, exporters must decide what products they wish to ship to foreign nations and identify the Harmonized System codes and product classification codes for the same. Further, these codes help business owners identify their products and clear customs efficiently, and is a prerequisite for filing several government documents.
Check Here to More about: https://services.india.gov.in/service/detail/gem-and-jewellery-export-promotion-council-1
- All traders must ensure that they comply with the guidelines laid out regarding the handling and transporting of hazardous wastes in India. Moreover, the Ministry of Environment and Forest is responsible for regulating and controlling the import and export of gemstones, jewellery, pearls, and precious metals in India.
- In certain cases, gem exporters will also have to submit test and analysis reports from laboratories certifying the quality of the products. When it comes to diamonds, several countries around the world ask for the Kimberly Process Certificate issued by the Gem and Jewellery Export Promotion Council of India. Additionally, this certificate ensures that the trade of diamonds does not lead to the financing of violent rebel movements.
- Once your company has all the required documentation, you can start searching for vendors and buyers in importing countries. Businesses should make use of government agencies to contact vendors and suppliers in foreign nations.
- Lastly, the business must take the help of a reputed shipping agency and customs house agency to fulfil their orders and get the gemstones to the importing country.
Documents Required for Gems Export from India
- Director-General of Foreign Trade registration certification
- Company incorporation certificate
- Import Export Code
- Kimberly Process Certificate
- Pollution certificate from the Pollution Control Board of India
- Pre-shipment inspection certificate
- Certificate of Origin
- Company PAN
- ID and address proof of the business owners along with their passport-sized photographs
- Bank certificate
- Memorandum or Articles of Association / Partnership deed
- Latest Income Tax returns
Additionally, any company that wishes to export gemstones from India must have the following;
- Bank account
- Permanent Account Number
- Import-Export Code
- Business Identification Number
- Registration Cum Membership Certificate from the Gem and Jewellery Export Promotion Council
- Enrolment No from the Director-General of Foreign Trade
- Valid identity cards and an updated profile of the exporter via Form Appendix-2.