Need a gold bank
* Annual gold demand in the country is 30 tons
* 148 kg gold import legally in 3 years
* 2583 kg of gold seized in 10 years
* Luggage party providing most of demands
Zarif Mahmud: Although there have been plans to make a gold policy in the country for years, no such policy has been implemented so far. Due to the crisis, many people involved in the jewelery industry are sitting on the road, but the economic wheel is being strengthened by the touch of this newly arranged industry. It is expected that in the near future, the wheel of Bangladesh’s economy will set a unique example through the provision of jewelery industry. Entrepreneurs and artisans involved in this industry will turn around.
Those involved in this industry say that with the increase in the price of gold, the purchasing power of people has decreased. Middle class people have stopped buying gold to keep up with the price. Even if you buy gold, it is not much only thinking of making ceremonial ornaments. At the same time, many small traders are closing their jewelery business and doing other things.
Many of the artisans who are involved in this industry have changed their profession and are living a miserable life because they are not doing well there. Many are returning to the jewelery industry.
Suman Gazi has been doing jewelery business in Gendaria of the capital for a long time. His paternal uncles are also involved in this business. His shop name is Shilpi Jewellers.
Suman Gazi told, “In 2020, the first shock came to this industry. Due to Corona, there is no sale until at least 2022. In 2019, at least Tk 25 lakh were sold every month. In 2020, it has reduced to Tk 2-3 lakhs. Even though Corona is over, due to the increased price of gold, the sale has now increased to Tk 5 lakh.
He said, ‘People are disoriented. Will they eat, treat, wear clothes or make gold ornaments first? I have been doing business in Gendaria area for at least 20 years. Those who used to make one bhari ornament now order 4 ani or 6 ani gold ornaments. And those who used to make small ornaments now order to make ornaments by plating gold on brass.
When asked to know the way out of this, Suman Gazi said, ‘As the col lapse of this industry is seen, if this industry turns around again, revolution can happen. For this, if the plan undertaken by Bangladesh Jewelery Association is implemented, this industry will turn around in the near future. Earlier Bangladeshi businessmen used to import and sell gold ornaments from Singapore and Dubai, now a large industrial group has taken over the industry. He is leading so that the country’s economy becomes stronger through the hands of this industry. This sector can become a new milestone for remittances.
He further said, ‘I heard that this industrial group has developed an industrial park for the jewelery industry. Where all the famous designs of gold ornaments of the world will be made. From where many Asian countries will import gold ornaments from Bangladesh. If this happens, there is a possibility of adding new products to the export account. I hope that the small institutions will be strengthened.
Arvind Roy has been doing jewelery business for a long time in the area of Munshiganj. Currently his business is not going well. Still, he said hopefully to Daily Industrty, “All over the world, new designs of gold ornaments are being made using modern machinery.” But earlier in Bangladesh gold jewelry was made by hand. As a result, I think this is also a reason for losing the market. But there is hope as gold industrial parks have been created in the country. Now gold ornaments of new designs will be produced in the country in keeping with the modern developed world. Then there is no need to import gold ornaments from Singapore, Dubai or other countries. On the contrary, traders from other countries will import gold ornaments from Bangladesh. This will create a new sector of remittances in the country.
Arvind Roy also said, “Besides, the small jewelery traders have to be rehabilitated.” Their contribution in this sector is very high. As the price of gold has gone up and the market has moved abroad, many small traders have been sidelined. Many people leave the profession and go to other professions but are not able to do well. Many of them are back in the jewelry business. Small traders should also be given importance by giving importance to this sector. At the same time, they have to work to turn around.
Tantibazar area of the capital. The traders here have been leading the gold market for ages. Here many have become fakirs from kings and many have become millionaires from dilapidated huts. Common people may not know how many types of gold are sold in this market. It is said that 40 percent of the total sale of gold in the country is sold here. Legally brought gold biscuits from abroad are melted and made Bengali in the branch of this Tanti Bazar.
Those associated with the jewelery industry say that if the government patronizes the jewelery sector along with the garment industry, it can create record foreign earnings. This requires providing the necessary facilities, as well as thinking positively about business policies and regulations.
Gold Policy of Customs Authority
Until now, a passenger coming through the airport was allowed to import 236 grams of gold bars and up to 200 grams of gold ornaments (100 grams duty free, remaining 100 grams duty) at the baggage facility. Passengers had to pay a duty of only Tk 2 thousand per passenger. On the other hand, if the commercially authorized dealers import gold, they have to pay a duty of around Tk 12 thousand per load. At the import level, the customs duty per consignment will be fixed at Tk 2,000 and a total of 20 per cent including 15 per cent VAT and 5 per cent advance tax on the value. Where a passenger can bring gold through the airport by paying a duty of only Tk 2 thousand in baggage. But in the new financial year (2023-24), it is proposed that a passenger will be able to bring half that i.e. 118 grams of gold. Those involved in the jewelery business fear that the market will become even narrower.
The most important thing is that if this industry can be promoted, there will be a huge possibility of exporting abroad by meeting the domestic demand. For this, provision of bond facility, duty concession and extradition and incentives have been kept in the policy.
Gold refinery breakthrough
A factory for gold refining is being built in the country. After importing unrefined and semi-refined gold, it will be refined in factories to produce gold bars and coins. They will be used for export as well as for making ornaments in the country. Along with this, the opportunity to export ornaments will also be created.
Dilip Kumar Agarwala, General Secretary of Jewelers’ Association and Managing Director of Diamond World, said, “To set up a modern gold refinery factory, direct and indirect investment of at least Tk 2,000 crore is required. Two companies want to build this refinery in Bangladesh. One is Bashundhara Group, another is Diamond World. For this, after the application of the two companies, initial approval has also been received.
Dilip Kumar Agarwala also said, ‘If the refinery is a factory, unrefined gold can be imported from various African countries including Congo, Mali. But a lot depends on what kind of duties and taxes will be levied on refined gold. Bringing unrefined gold from abroad and refining it is completely new for us.
Need gold exchange and bank
Those associated with the jewelery business say that a gold bank and exchange is needed in the country to develop the gold industry. There will be two steps. One is that a customer can go to any bank and deposit their gold. You can take loan against deposited gold. You can sell again. You can repay the deposited amount by paying off the loan. Banks had this rule which has now been abolished. In this, some jewelery owners are giving high interest loans against gold. Gold is getting back by paying that high interest. Many people are selling gold as they are unable to pay the money.
Gold exchange on the other hand is exactly like stock market. A customer can buy gold coins from the stock market if he wants. You can also sell whenever you want. Let’s say someone buys a heavy weight gold coin for Tk one lakh. After a few days, the price of that one large coin was Tk 1 lakh 5 thousand. He gained Tk 5 thousand. In this way many customers can come to this business. Then if someone wants (new businessman) he will trade gold in the stock market instead of doing jewelry business. It has the potential to turn around the gold industry.
Jewelery will overtake garment
According to the gold policy, various European countries including Belgium, India and China are among the jewelry producing and exporting countries in the world. In 2019, the market for machine and hand-made gold ornaments in the world was $22,930 billion. In 2025, the size will increase to $29,017 billion.
Although there is no precise calculation, the country has an annual demand of about 20-40 metric tons of gold. Only 10 percent of its demand is met with old ornaments. The rest comes from abroad under the baggage rule. A lot of gold comes illegally. Therefore, since 2019, Bangladesh Bank has given gold import licenses to 19 institutions including a commercial bank to restore transparency in the gold market and jewelery business. Once gold refineries, gold policies, implementation of gold industry and gold banks and exchanges are completed, the jewelery sector will overtake the garment industry at some point. The amount of foreign exchange coming in now is likely to be even more.
Gold policy did not see light of day
The speed with which the gold policy was formulated in 2017 has not seen the light of day even in the last 6 years. As its full implementation has not yet been completed, doubts have arisen among many. Those associated with the jewelery business say they want its speedy implementation. It is in their interests that its quick implementation has become necessary. Because this will put their long traditional business on a moral and legal basis. They can do business with their heads held high. This industry will further develop employing about 2 million people. Another important aspect of the policy is that it emphasizes on protecting the interests of consumers. A buyer will be assured of the purity of the jewelery he is buying with his hard-earned money.
Gaining reputation in international market
Those associated with this sector hope that once the gold policy and gold industry are established, it will be possible to gain fame in the international market including South Asia. They claim that there is no other sector after the garment industry in which it has achieved fame. Each one from different places is trying to gain fame through export in the international market as well as to earn foreign currency. But no sector is progressing. Expatriate income increases and decreases. So far, the garment sector is standing with a strong fear. If the gold industry can withstand all kinds of patronage, it will surpass the garment industry in the near future and gain fame along with foreign exchange earnings.
Budget, tariff discrimination
Under the new rules, a passenger from abroad can bring one gold bar weighing 117 grams on payment of duty. Earlier, a passenger could bring gold bars weighing 234 grams from abroad as per baggage (import) rules.
In the budget proposal, the finance minister said that the duty for bringing 11.664 grams or 1 load of gold to a passenger from abroad was Tk 2,000. In the budget of the next fiscal year 2023-24, the duty on the same amount of gold import has been increased to Tk 4 thousand.
Those involved in the jewelery business say, ‘Duty tax has been discriminated in the budget in the new budget. The industry is trying hard to turn around. Due to the increase in duty in the budget at such a time, the businessmen of this sector are in a state of shock.
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