G.V. Sreedhar, Chairman of the All India Gems & Jewellery Trade Federation (GJF) since 2015, was associated with the organization since its inception. He is also the Past President of the Jewellers Association, Bangalore [JAB]. Under his guidance, GJF successfully launched the unique Jewellers Identification Card (JID).
In parallel with this, G.V. Sreedhar is an honorary Board Member of the Gem & Jewellery Skill Council of India (GJSCI); President of The Avenue Road Commercial Association (TARCA) in Bengaluru; and an Approved Valuer of Tirumala Tirupati Devasthanams (TTD).
In an interview with Rough & Polished, G.V. Sreedhar gives his opinion on a gamut of issues in the gems and jewellery industry in India, including the recent Goods and Services Tax (GST) proposed by the Indian government.
How is the Indian gems and jewellery sector doing right now; and what are the challenges being faced currently. For the benefit of our readers, can you give us an overview of the industry and its growth prospects in the coming years?
The industry is growing quite well and demand has increased due to drop in gold price as well as the good monsoon this year. The major challenge we see for the industry is the proposed rate of GST at 4%, which will act as a major setback for the industry, as this will result in drop in tax compliances and revenue and will also encourage smuggling.
We have proposed GST at 1.25% to the Government and our representation contains details of various issues that needs to be addressed in the GST legislation. Apart from this, there are many more challenges faced by the industry, such as PAN card limit, custom duty, which needs to be reduced to 5%, and many more. GJF is actively representing these issues to the Government.
How successful has the domestic sector been, returning to normal after an obvious loss due to the long strike earlier this year? Some members feel that the domestic market should be represented by ONE organization while dealing with the Government, whether Central or State. What’s your take on this?
Normalcy has returned to the industry. With the upcoming festive season, we predict a rise in demand by at least 20% as compared to the previous year. On behalf of the industry, GJF is representing all domestic related issues and suggestions to the Government, since we represent over 300,000 jeweller community and have affiliation with more than 100 jewellery associations and federations. The same has also been acknowledged by various government officials and ministers, considering GJF as an apex body of the gems and jewellery industry.
With nothing positive coming out from the strike, have the Indian jewellers now accepted the excise duty structure by the government on the whole? Or are there any more issues that the GJF is planning to take up with the government?
The strike that went on for 45 days and the loss of business was the only negative impact of the excise duty. The industry is not averse to taxation, but it is the application of rules and regulations that were not suitable. However, with the help of the High Level Committee (HLC) report, the industry has obtained a big relief. Almost all recommendations of the HLC were accepted by the Government. In fact, the entire Excise Norms were for the first time drafted for the gems and jewellery industry based on the recommendations by the HLC. This has never happened before in any other industry.
Recently, the Income Tax Department carried out raids at over 60-70 jewellers across the country for tax evasion and were asked to declare their additional gold stock. Has the Income Tax Department jumped the gun, as the deadline to declare undisclosed income is Sept. 30? Your comments.
GJF has been actively promoting the Income Declaration Scheme (IDS) to its members through SMS, emailers, social media, word of mouth. Being a compliance driven federation, we always promote ethical business practices in business. We need to understand that we have a Government that wants to walk the talk, and the gems and jewellery industry should play a very important role in the progress of the nation.
How useful is the latest mobile app by GJF, and what has been the response from the industry members? Any more new GJF’s initiatives in the offing for the Indian gems and jewellery sector?
We have launched the first phase of the mobile app, which has information about GJF and the events we do to promote the industry. It also has a members directory, which helps the members to network and connect amongst the industry peers.
In today’s fast moving digitalization, this was a very necessary step from GJF. The response is very good, wherein many of our members have downloaded the app and are using it on a daily basis. Soon, we shall be adding many more features in the app.
GJF has taken up numerous issues faced by the gems and jewellery sector with the Government of India like pan card issues, excise duty, smoother transit process for the gems and jewellery parcels and many more. Have all these issues been addressed and solved as of today and what is the status now?
The excise duty issue has been completely resolved by the Government, wherein the report of HLC was unanimously accepted by Government departments. This has provided huge relief to the industry.
GJF is representing to the Government on the PAN card, custom duty issue wherein the original rate of 2 Lakh and above and 10% still stands. We are hopeful that the Government will very soon bring in some amendments in these rules as well.
Gold prices are going up and may see a further rise in the coming days. Will this affect the demand for gold jewellery / coins, given that gold is traditionally purchased during the ensuing festive seasons including Akshaya Tritiya, Diwali, etc.?
The rates are in fact dropping. We foresee a good demand this festive season. The wedding season will also provide a spike in the demand for gold jewellery. With the increase in disposable income, and gold being a product that helps sail in through financial times will always be a preferred option for the customer to buy and invest. This Diwali, we are hopeful to achieve 20% more sales as compared to the previous year.
Over the years what changes have you seen in India with regards to consumption of diamond jewellery? In terms of the quality of diamonds, does the demand differ region-wise? Please give us an overview...
The gems and jewellery industry is unique in nature, wherein the customer tastes differ from state to state. For example, customers based in Delhi will generally prefer light weight designs with diamonds, whereas a customer in Kerala will prefer the traditional designs with less diamonds. Which makes it easy to say that demands of diamonds also differ as per the state and the preference of the customer.
How important do you think millennials are in the overall drive for jewellery sales, in both plain gold and colour stone or diamond studded? Should promotional activities be structured keeping this section of buyers in mind, as eventually they will be the big spenders in the future? Your opinion.
Millennials are extremely important as they will be the decision makers in the future. In fact, many in the industry have already realized this and design their communication tools targeting this audience. In the gems and jewellery industry, there has been a huge transformation as well, many brands have started using various platforms, such as social media to promote their products.
What is the current condition of the e-commerce jewellery business in India? Do you see future good growth in this space, given that there have not been many new entrants of late? Is online jewellery business mostly patronized by younger generation who purchase entry level jewellery, and high-end jewellery can never find buyers online? Your views.
The e-commerce platform is flourishing across the segments. This platform will grow, but it also depends upon the value and service that one has to offer. With Prime Minister Shri Narendra Modiji’s vision of digitalization, it is a good opportunity for jewellers to benefit and take full advantage of the technology that is available to us. High end jewellery also finds buyers online. There are many online real estate portals that are doing good businesses, then why not jewellery? I am sure we have a huge potential to explore this medium and offer the best service at value for money.
Aruna Gaitonde, Editor-in-Chief of Asian Bureau, Rough & Polished
