Government Revises Wastage and Input-Output Norms for Gold and Silver Jewellery Exports

The Indian government has recently updated the norms regarding the permissible wastage during the manufacturing process of gold, silver, and platinum jewellery intended for export. These revisions come in response to industry feedback and aim to align regulations more closely with actual manufacturing practices.

Understanding Wastage Norms

Wastage norms refer to the acceptable percentage of precious metals that can be lost during jewellery production. On Friday, the Directorate General of Foreign Trade announced the revised standards, which will take effect on January 1, 2025. This change follows industry concerns raised after the original norms were introduced on May 27, 2023, which significantly lowered the permissible wastage levels.

Key Changes in Wastage Allowances

Under the previous rules, the wastage allowance for plain gold and platinum jewellery was reduced to 0.5% from 2.5%, while silver jewellery saw a reduction from 3.2% to 0.75%. In the case of studded jewellery, the previous allowance of 5% was cut down to 0.75%. The newly revised norms provide a more favorable allowance for manufacturers:

• Handmade Gold and Platinum Jewellery: Wastage increased to 2.25% (up from 2.5%).
• Silver Jewellery: Wastage now set at 3% (up from 3.2%).
• Machine-Made Gold and Platinum Jewellery: Wastage allowed at 0.45%.
• Machine-Made Silver Jewellery: Wastage reduced to 0.5%.
• Handmade Studded Jewellery: Wastage increased to 4%.
• Machine-Made Studded Jewellery: Wastage allowed at 2.8%.

Additionally, the order encompasses other items made from these precious metals, including idols, coins, and medallions.

Impact on the Industry

The industry had two primary requests: to establish wastage norms that reflect realistic manufacturing conditions and to provide an adequate transition period to adapt to new regulations. The revised norms have been welcomed by industry stakeholders, who had previously expressed concerns about the stringent rules introduced in May.

The Commerce Ministry has also postponed the implementation of the earlier norms until December 2024, allowing manufacturers time to adjust to these new standards.

Conclusion

These revised wastage and input-output norms are essential for ensuring that India’s jewellery export industry remains competitive while adhering to regulatory requirements. By allowing for realistic wastage percentages, the government supports local manufacturers while ensuring compliance with international export standards.

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