A saleswoman shows a gold earring to customers at a jewellery showroom in Mumbai. Photo: Reuters

With the prolonged strike in the gold and diamond jewellery market raising fears of job security and steady income, many artisans have migrated to the imitation jewellery industry in the last one month.

The Gold, silver and diamond jewellery industry was on an indefinite strike on March 1, following an announcement of 1% excise duty on jewellery in the Union Budget by Finance Minister Arun Jaitley.

The strike had raised concerns among artisans of uncertain work flow and steady income.  Faced with the prospect of no income, many migrated from gold and silver jewellery to making imitation jewellery.

“Getting work is not easy task in precious metals. People do not easily trust artisans. Moreover, remuneration is also not fixed as it depends on the amount of work they get. While in imitation jewellery, flow of work is more than precious metals which tends to offer a secure and steady income. This has led to migration of artisans to our industry,” said Nagendra Mehta, secretary of Imitation Jewellery Manufacturer’s Association (IJMA).

Currently, out of total 2.5 million artisans active in the imitation jewellery industry, nearly 40-45% of artisans have migrated from precious metals. According to imitation jewellery industry, it is easy to settle down in imitation as art work is mostly similar.

Narendra Mehta, president of Rajkot Jewellery Association, said, “Designs and art works are almost same in imitation and precious metals jewellery making. This makes it easy and quick for artisans to settle down in imitation jewellery making.”

Apparently, despite the excise duty imposition duty coupled with a 10% import duty, precious metals’ jewellery still tends to be competitive over imitation jewellery where 1-5% value added tax (VAT) is levied in different states, along with 6% excise duty.

However, it is on the pricing that the imitation jewellery industry tends to score over precious metals. For instance, a gold ring would conservatively cost around Rs 5,000-Rs 7,000 while an imitation ring of the same art or design work would cost around Rs 1,000.

Nevertheless, the imitation jewellery industry too has been demanding reduction in excise duty to 1% for some time now.

Within the industry, Rajkot is known for casting or machine made imitation jewellery in India with over 450,000 artisans associated with it, while Mumbai is the largest hub for handmade imitation jewellery.

Narendra Mehta said, “In past couple of years, gold and silver jewellery industry has faced several issues such as strike and price rise in metals. Many artisans of precious metals have entered in imitation jewellery market due to strike in February and March this year.”

Most of the artisans in the industry come from West Bengal (WB) as they are skilful in designing and art. However, Assembly elections in that state have also resulted in several workers returning to their home states on a prolonged vacation. According to imitation jewellery industry, nearly one million workers from Bengal are engaged in this industry, out of which around 50-60% have gone back for the polls.

“With several artisans returning home to vote during state assembly elections, this has created manpower shortage, especially in and around Mumbai which is a hub for handmade imitation jewellery in India,” Mehta said. “Because of this temporary migration, production of imitation jewellery has been affected by nearly 20 per cent.”

The industry also faces challenge from China which has been exporting imitation jewellery, thereby capturing nearly 40% of the domestic market. As per industry sources, Indian government too is losing about Rs 3,000 crore every year due to Chinese imports.

“Chinese jewellery is almost 20 per cent cheaper than that made in India, as they make it on machines and produce it in large quantities. That’s why Indian traders now prefer to import finished imitation jewellery from China,” said Mehta.

 [Source:- Business-standard]

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