Global opportunity for Indian jewellers in South Africa

South Africa has called upon Indian companies to set up jewellery manufacturing units in the country by taking advantage of its latest policies.

Under the new industry policy programme, South Africa is encouraging jewellery manufacturing activities that will help add value to its raw materials including gold, silver and a variety of minerals.

PTI reported - "Although India produces only less than one per cent of the global gold production, it is involved in more than 60 per cent of the value additional activities of the yellow metal. This is something that the entire world, including South Africa, would like to learn from India," said France Morule, High Commissioner of South Africa in India at an event.”

South Africa, which mined 150 tonnes of gold last year, has brought various schemes to support value addition including gold loan scheme for emerging and establishing jewellery makers, he said.

"I invite the Indian jewellery industry to set up manufacturing operations in South Africa and take advantage of its policies both at the domestic level as well as overseas including special privileges it enjoys from the US and the European Union," Morule said at the Assocham event on gold.

South Africa enjoys favoured nation status with the US via the African Growth and Opportunity Act (AGOA) 2002, which allows South African gold jewellery fabricators to export their finished product to the US free of import duties.

"This gives South African jewellery manufacturers a six per cent cost advantage over their European and far eastern competitors on whom the six per cent duty is levied for jewellery destined for the US. The predominance of the US as an importer of manufactured jewellery is partly a function of South Africa benefiting from AGOA status with that country," he said, adding that Indian companies can take advantage of these opportunities.

Morule further said that a free trade agreement between South Africa and the European Union is being developed through the gradual abolition of import and export tariffs from 20 per cent in 2003 to zero by 2020 between two trading partners. This implies that the country will be able to export local gold jewellery duty free into Europe. Therefore, over the next ten years, the EU market will gradually open up to South African Jewellery manufacturers at an increasingly attractive fiscal rate.

Urging Indian companies to take advantage of these opportunities, Morule said that India has the ability to create capacity building programmes in South Africa to impart skills which will develop and enhance the local jewellery industry. "We are aware that some of you are already present in South Africa and we would like to invite more companies from India to follow suit. This will strengthen the already excellent relations between the two countries," he added.

The bilateral trade between India and South Africa during 2014-15 was USD 11.79 billion. India imported gold and precious metals worth USD 1.89 billion from South Africa in the same period.