Lok Sabha Question No. 3908 (UNSTARRED), answered on 2019-07-17
Subject: Impact of GSP Withdrawal on Export of Gems and Jewellery
Ministry: COMMERCE AND INDUSTRY
Asked by: Bidyut Baran Mahato, Gajanan Chandrakant Kirtikar, Sanjay Sadashivrao Mandlik

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 3908 TO BE ANSWERED ON 17 th JULY, 2019

## IMPACT OF GSP WITHDRAWAL ON EXPORT OF GEMS AND JEWELLERY

## 3908.  SHRI BIDYUT BARAN MAHATO:

SHRI GAJANAN KIRTIKAR:

SHRI SANJAY SADASHIV RAO MANDLIK:

Will the Minister of COMMERCE & INDUSTRY ( वा�ण�य एवं उ�योग मं�ी ) be pleased to state:

- (a) whether  USA  has  withdrawn  the  duty  benefits  to  India  under  the  Generalized  System  of Preferences (GSP) and if so, the details thereof along with the reasons for the same;
- (b) whether Crisil Research Ltd. has said in a report that this step would adversely affect the export of gems and jewellery;
- (c) if  so,  the  details  thereof  and  the  steps  taken/being  taken  by  the  Government  to  protect  the interest of such exporters;
- (d) whether Trade data for last month showed that exports of labour intensive sectors including gems and jewellery were dismal; and
- (e) if so, the details thereof and the steps taken by the Government to increase the export in such sector?

## ANSWER

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## THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI HARDEEP SINGH PURI)

- (a) Yes, Sir. The benefits under GSP have been withdrawn w.e.f. 5 th June, 2019.  India exported goods worth of US$ 6.3 Billion (as per USTR figures) to USA under the GSP programme during the calendar year 2018, which was 12.1% of India's total export to USA in the year.  The reason stated by USA was that India has not ass ured the USA to provide equitable and reasonable access to the market.
- (b)  &  (c)  Crisil  Research  Ltd. is  not  a Government research organization. As per analysis of Gem & Jewellery Export Promotion Council, only 1% of India's total Gem and Jewellery exports to USA are expected to be impacted due to the recent withdrawal of GSP benefit.
- (d) & (e). Exports of key labour intensive sectors to USA in June, 2019 vis-à-vis June, 2018:

## ( (P) Provisional)

|   S.No. | Commodity                        |   Jun 2018 |   Jun 2019 (P) | %Growth   |
|---------|----------------------------------|------------|----------------|-----------|
|       1 | Gem &Jewellery                   |     727.3  |         608.06 | -16.4     |
|       2 | Textiles and allied products     |     682.94 |         683.95 | 0.15%     |
|       3 | Leather and Leather Manufacturer |      86.99 |          84.45 | -2.92%    |

Source: DGCIS

In order to promote India's exports including labour intensive sectors, the Government has taken several measures through Foreign Trade Policy (FTP) 2015-20 and other policy measures taken from time to time.  FTP provides framework for increasing exports as well generation of employment and increasing value addition in the country through schemes of incentives on exports and duty remission/exemption on input for export production.  At the time of Mid-Term Review of FTP in December, 2017, incentive rates for labour intensive / MSME Sectors under Merchandise Exports from India Scheme (MEIS) were increased by 2%.  The rate under Interest Equalization Scheme was increased to 5% for MSME Sectors w.e.f. 02.11.2018 and merchant exporters were covered under the  Scheme w.e.f.  02.01.2019.  A  new  scheme for  Rebate  of St ate  and  Central Taxes  and  Levies  (RoSCTL) covering  export  of  garments  and  made-ups  was  notified  on  07.03.2019.    Further,  the  Government  provides financial assistance for participation in international fairs, organizing buyer-seller meets, creation of export related infrastructure, etc. under various schemes of the Department of Commerce to boost exports.

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