By Biman Mukherji
NEW DELHI, June 30 (Reuters) - India faces a new competitive
threat from nations like China after a United States decision to
revoke the duty-free status for gold jewellery from India,
industry officials said on Saturday.
The United States said on Thursday that it was terminating
some trade benefits for India, Brazil and other developing
countries under a programme revamped late last year by Congress.
Vasant Mehta, vice-chairman of India's Gems and Jewellery
Export Promotion Council (GJEPC) said a 6.5 percent duty plus
surcharges, totalling less than 7 percent, would now be levied
on Indian jewellery, in line with the duty imposed on imports
from other countries.
"We had a marginal advantage, that is gone now," he said.
"For a US buyer, the cost of buying from India or China from
July 1 would be the same. Time will only tell, but it will
certainly have an impact on our jewellery," he added.
The United States accounts for about 40 percent of India's
total jewellery exports.
India shipped $1.6 billion in gold jewellery to the United
States under the Generalised System of Preferences programme in
the first 10 months of 2006, the US Trade Representative's
office said when it initiated its review last year.
Bakul R Mehta, convenor of the Gems and Jewellery Export
Promotion Council, said that there will be a setback to India's
jewellery exports, but he was hopeful that things would even out
over the long-term.
"Possibly, the jewellery we produce in the long run will be
able to absord the duty. Immediately, there will be a setback,"
he said.
Indian industry officials said the loss of competitive edge
has come just when China was aggressively pushing to expand its
jewellery sales in United States.
Thursday's U.S. statement came just one week after an
acrimonious meeting in Potsdam, Germany, between the United
States, the EU, Brazil and India that failed to produce a
long-awaited breakthrough in world trade talks.
U.S. officials accused the two leading developing countries
of making impossible demands for cuts in U.S. farm subsidies,
while refusing substantially to open their own markets to more
U.S. farm and manufactured goods.
((Editing by Alistair Scrutton and Gerrard Raven; Reuters
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Keywords: INDIA JEWELLERY