Trade policy cheers gem and jewellery sector, shares up
today Aug 27, 2009
MUMBAI (Reuters) - India's gem and jewellery makers cheered government sops for exporters in the latest trade policy for 2009/10 with shares of big exporters like Gitanjali Gems and Rajesh Exports jumping 9.5 percent and 13.7 percent.
India's commerce and industry minister, Anand Sharma, said earlier on Thursday 27 August the government would allow a tax refund scheme for the jewellery sector, adding there were plans to set up diamond bourses.
He also said India plans to cut transaction costs for exporters and ensure the availability of dollar finance to help reverse an exports decline.
Shares of Gitanjali Gems ended up 4.65 percent at 124.95 rupees, while Rajesh Exports closed up 8.58 percent at 50.00 rupees.
About 13 percent of India's total exports is accounted for by gems and jewellery, Vasant Mehta, chairman of The Gem & Jewellery Export Promotion Council (GJEPC), said.
"This is a good policy, it should boost the growth of gem and jewellery exports," Mehta, told Reuters.
The industry had sought an increase in dollar liquidity from India's foreign exchange reserves to the tune of $3-$4 billion.
"Overall it seems to be a good policy...but we want to see if the dollar availability scheme can really become effective," said Gitanjali Gems Chairman Mehul Choksi.
India is expected to return to a high export-growth path of an annual 25 percent by 2014, the minister said at a press conference.
Sharma also said India would extend a 2 percent interest subvention scheme for exporters till March 2010. The scheme was scheduled to end in September.
The government also extended income tax benefits for wholly export oriented units by one additional year till March 2011.
The government's plans of setting up of diamond bourses was also a good step as it will make India more of a trading centre, Choksi said.
"Most exporters have suffered badly in the last two years and still continue to suffer primarily because of market conditions in U.S. and Europe. So to boost the exports some kind of financial package would have been a welcome sign," Rajesh Mehta, chairman and managing director of Rajesh Exports, told NDTV Profit.
"But there are fair amount of positives as well," he said.
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