Domestic fashion jewellery manufacturers are facing an onslaught of cheap Chinese imports which has surged by 25% year-on-year, with importers under-invoicing shipments and wrong declaration of goods to avoid anti-dumping duties making them almost 50% cheaper than locally produced ones, industry executives said. These imports are not coming under the 7117 HSN Code for fashion jewellery thus bypassing India’s duty of ₹600 per kg. HSN code is a uniform code that classifies over 5,000 products and is accepted worldwide.
This rampant import is severely impacting the Indian fashion jewellery manufacturing business, with many units reducing their production and workforce.
Nagendra Mehta, president of India Imitation Jewellery Manufacturers’ Association (IIJMA), said certain custom clearing and forward agents are under-invoicing Chinese imported jewellery making them about 50% cheaper than Indian made.
In FY20, Chinese fashion jewellery controlled 25% of the Indian market, which has doubled to 50% in FY25, Mehta said.
The size of the Indian fashion jewellery market is about ₹40,000 crore as compared to ₹30,000 crore in FY20.
The local manufacturers in Mumbai, the biggest hub of fashion jewellery manufacturing and trading, are reeling under severe loss of business. Other centres like Rajkot in Gujarat, Singur in West Bengal and Machilipatnam in Andhra Pradesh are facing a similar crisis, industry executives said.
India had initially imposed custom duty at the rate of ₹400 per kg or 20% of the value of the goods, whichever is higher, in 2022. Two years later, it was raised to ₹600 per kg or 25% of the total value of the goods, whichever is higher.
“The duty hike could not prevent Indian fashion jewellery importers from importing jewellery from China through malpractice. There is massive duty evasion by wrong declaration of goods or by importing the goods in different HSN Code .There are certain clearing and forwarding agents who charge ₹150-₹250 per kg for freight charges, duty payment and logistic expenses and deliver the goods to the buyers. We have already brought this to the notice of the government and customs authorities,” Mehta said.
