The government's proposed gold policy, being finalised after recommendations from a NITI Aayog panel, should lead to a big rise in India's sourcing of refined gold from local refineries. Data compiled by the global gold miners' body, World Gold Council, showed India's total dore (unrefined gold) import was 245.7 tonnes for calendar year 2017, compared to 141.9 tonnes the previous year. Recovery through melting of used jewellery was 88.4 tonnes from local refineries in calendar 2017, compared to 79.5 tonnes in 2016. Another 8.8 tonnes of gold was sourced from other sources, against 9.9 tonnes in 2016. If total import is taken as net of exports, then domestic supply is estimated over 40 percent. The new policy is likely to boost local refineries immensely. Gold supply through local refineries might increase to 80 percent in the next few years, from over 40 per cent now.
Gems & Jewellery Industry Status
The Gems and Jewellery sector plays a significant role in the Indian economy, contributing around 7 per cent of the country's GDP and 15.71 per cent to India's total merchandise exports. It also employs over 4.64 million workers. One of the fastest growing sectors, it is extremely export oriented and labour intensive. Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewellery sector as a focus area for export promotion. The Government has recently undertaken various measures to promote investments and to upgrade technology and skills to promote 'Brand India' in the international market. India is deemed to be the hub of the global jewellery market because of its low costs and availability of high-skilled labour. India is the world's largest cutting and polishing centre for diamonds, with the cutting and polishing industry being well supported by government policies. Moreover, India exports 75 per cent of the world's polished diamonds, as per statistics from the Gems and Jewellery Export promotion Council (GJEPC). India's Gems and Jewellery sector has been contributing in a big way to the country's foreign exchange earnings (FEEs). The Government of India has viewed the sector as a thrust area for export promotion. The Indian government presently allows 100 per cent Foreign Direct Investment (FDI) in the sector through the automatic route.