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Last Updated: Thursday, 3 March, 2005, 14:55 GMT
India's gold jewellers on strike
Indian women wearing jewellery
India's gold and diamond market is worth about $11bn
Gold jewellers across India have started a strike against a proposed 2% tax on branded gold jewellery.

Minister of Finance Palaniappan Chidambaram made the proposal on Monday in the federal budget.

Small jewellers fear that the excise office will tax small, local brands - not just the large brands targeted by the tax.

Small jewellers make up about 90% of India's $11bn (5.7bn; 8.4bn euros) gold and diamond market.

The BBC correspondent in India explains that big brand names are making rapid progress in the country, with a total of 28 brands doing business there.

Industry fears

Both big and family jewellers fear that the tax will hit the whole gold industry.

"The 2% excise duty levied on branded jewellery will add up... and will have an adverse impact on the industry in the long run," Manoj Subramanian, marketing manager at Ishi's Jewellery, told local media.

Jewellers in the states of Maharashtra, Gujarat and Delhi have already begun to strike, local media said, while producers in Kolkata begin the protest on Thursday.

Last year, the US government abolished taxes on Indian jewellery imports, leading to a rapid expansion of the industry.


SEE ALSO:
India unveils anti-poverty budget
28 Feb 05 |  Business
India relaxes gold import rules
28 Jan 04 |  Business


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