Government puts on hold new wastage norms for gold, silver jewellery exports till July 31

The government on Tuesday put on hold the new norms for permissible wastage amount for gold, silver and platinum content in jewellery exports until July 31, 2024, just a day after the notification after the gems and jewellery industry raised serious concerns on the new standards.

The government on Monday notified revised norms related to the permissible amount of wastage and standard input output with regard to the export of gold and silver jewellery. The industry claimed that the norms were notified without any consultation.

The Directorate General of Foreign Trade (DGFT) on Tuesday that now keeping in view the representation of the Gem and Jewellery Export Promotion Council highlighting the difficulties to their sector from the revised norms, another opportunity will be given to the industry for submission of their views.

The DGFT said that the industry and the council can provide information/data to the concerned norms committee within one month.

“Accordingly DGFT…hereby places the Public Notice…dated May 27, 2024 in abeyance up to July 31, 2024 with immediate effect,” a public notice by the directorate said.

For the interim period, wastage norms as existed prior to the issuance of the May 27 notice stand restored.

The DGFT said that the industry consultations on the subject had been held on March 5 and 21 this year.

On May 27, The Directorate General of Foreign Trade (DGFT) in a public notice tightened these norms, following which the exporting community flagged its concerns over it.

The industry would have to submit data on manufacturing workflow and justification for process wastage and recovery at different stages of jewellery making.

An industry official said that the revised wastage norms were drastically reduced, which could have impacted the sector's exports of plain and studded jewellery.

The council approached the DGFT on Tuesday for its intervention stating that the May 27 public notice would severely impact the country's jewellery exports.

They have suggested the directorate commission a study with top exporters in each category and then come to the conclusion on the requirements of these revised norms.

The government has also introduced standard input output norms with regard to the export of gold and silver jewellery.

The May 27 notice has stated that the weight of mountings and findings (or parts) of gold or silver if imported and used in export products, will not be included in determining the net content of gold and silver in export products.

Under the revised norms, the permissible wastage by weight for plain gold and platinum jewellery was reduced from 2.5 per cent to 0.5 per cent.

Similarly, for studded jewellery, the wastage limit was reduced from 5 per cent to 0.75 per cent.

The norms for wastage for medals and coins were cut down from 0.2 per cent to 0.1 per cent.

After this May 28 notice, the changes are now kept on hold.

While some experts have said that the tightening would have helped the industry to adopt better manufacturing practices to reduce wastage, others have opined that it may have increased the cost of production.

Standard input-output norms (SION) are rules that define the amount of input/inputs required to manufacture a unit of output for export purposes.

Input-output norms are applicable for products such as electronics, engineering, chemical, food products including fish and marine products, handicrafts, plastic and leather products.