In order to ensure secure, reliable and adequate long-term supply of raw materials for the domestic gems and jewellery industry, there is an urgent need for India to engage directly with producer countries through diplomatic channels such as free trade agreements (FTAs) with countries possessing key raw materials, an Assocham study said.
“Securing raw materials at competitive prices is an issue of survival for India’s gems and jewellery industry as they are mainly sourced through imports considering that domestic source of raw materials is very weak,” noted a study titled ‘Import Dependency of Indian Manufacturing,’ conducted by Assocham.
“Entering into FTAs with countries possessing raw materials, encouraging mining exploration or investment in major African countries by way of guarantees to investors etc. and investment in overseas diamond mines by the consortia promoted by trade are certain possible options available in this regard,” suggested the study prepared by the ASSOCHAM Economic Research Bureau.
It is necessary to make the deal for raw materials at a very fair price, as it directly affects the cost of production which subsequently adds to the cost of finished products’ and adversely affects the gems and jewellery exports and does not let India stand in the competitive international market.
About 90 per cent of raw materials for the industry are imported and rough diamonds alone account for over 50 per cent of India’s total gems and jewellery raw material imports.