Long-term ban on foreign investment will help local jewellers, artisans prosper
The economy will experience a 100% change in three years if the government accepts the ban
As the general secretary of Bangladesh Jewellers Samity (Bajus), I am calling for a long-term ban on the production, marketing, and wholesale and retail sales of gold jewellery and jewellery crafted by local artisans for the next 20 years.
I am one of the signatories who proposed that Bajus release an amendment notice to the Ministry of Commerce through a new draft. Our demands for the amendment include the inclusion of a gold refinery and a ban on large-scale chain jewellery shops which have been putting our local artisan community in distress.
On behalf of Bajus, we have also called for reducing VAT on jewellery products and customs duty on gold imports.
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The proposal also includes reducing the existing VAT on gold ornaments from 5% to 1.5%. As gold is a precious metal, a 5% VAT at the consumer level culminates in a hefty amount. As a result, low- and middle-income consumers become reluctant to pay the VAT.
Furthermore, customers who are more financially solvent have been purchasing duty-free jewellery from neighbouring countries bypassing the VAT. Also, local traders are facing a shortage of customers and the government is losing a big amount of revenue due to the loopholes in the policies.
We already know that Bangladeshi artisans are one of the best in the world in making handmade jewellery, but the country is losing earnings due to the extra VAT. This puts the domestic gold industry at higher risk.
If we have to compare VAT limits on jewellery with that in our neighbouring countries, Dubai imposes a 1% VAT on gold ornaments while the rate in India is 3%. Generally, VAT is levied on the added value. So, we proposed a 15% VAT on jewellery wages or 1.5% on the total price.
The revised gold policy prioritised local investment for the next 20 years so that the domestic industry can develop and build trade capacity along with operating gold refineries in the country. But foreign investment in the production and sale of gold ornaments had not been banned.
The gold policy prohibited foreign investment in setting up and operating gold refineries. But foreign investment in the production and sale of gold ornaments – one of the key points of the policy – was not banned. We requested the commerce minister to do that.
As a result, we are requesting the government to include the 20-year ban on foreign investment along with other preventative measures to secure the domestic gold and jewellery market.
It is because of these large-scale chain shops and the lack of national policies that local jewellers from all over the country have been suffering for years. If the government does not accept our proposal and does not enforce a ban on foreign investment in the jewellery industry, local artisans' fates will hang even more in the balance. We may even end up losing our traditional jewellery artisans, and the art itself will perish.
Before we decided to take this step, there were no policies on gold trade in our country for dealership and permissions, and there still is not any. This endangers our local jewellers and artisans as the large-scale chain shops are profiting from the trade. That is why Bajus has decided to request the government to look into the matter.
The influx of large-scale chain jewellery shops in Bangladesh has heavily distressed the small- and medium-scale businesses as well as artisans who work day and night to craft traditional jewellery pieces from scratch. If we do not fight for a set of new policies, local jewellers, artisans, and their art will cease to exist. We want the government to address this issue with seriousness.
If the government takes action immediately and accepts our proposed ban on foreign investment in the jewellery market for 20 years, the economy will experience a 100% change in three years.
To our relief, the government has already formed a team and started working on creating a gold refinery plant. Now we want no foreign investment in the jewellery trade for the next two decades.
We want this trade to prosper and the only way to ensure this is by preserving the art of jewellery-making and the local artisans who have been masterfully doing it for many, many years – even when foreign investment was not a party in the trade.
