‘Massive duty evasion’: Chinese fashion jewellery imports surge 25%; undercut Indian makers by 50% by reportedly bypassing HSN code

NEW DELHI: Indian fashion jewellery makers are reeling under the surge of Chinese imports, which rose 25% year-on-year. Industry executives said importers are misdeclaring shipments and under-invoicing goods to evade anti-dumping duties, making Chinese jewellery nearly 50% cheaper than Indian products.Chinese jewellery’s share of the Indian market has doubled to 50% in 2024-25 from 25% in 2019-20, according to Nagendra Mehta, president of the India Imitation Jewellery Manufacturers’ Association. Over the same period, the market itself expanded from about Rs 30,000 crore to Rs 40,000 crore.“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 under different HSN Code,” Mehta said, as quoted by ET.He added, “There are certain clearing and forwarding agents who charge Rs 150-250 per kg for freight charges, duty payment and logistics expenses and deliver the goods to the buyers. We have already brought this to the notice of the government and customs authorities.”Imports are reportedly bypassing the 7117 HSN Code for fashion jewellery, which carries a duty of Rs 600 per kg. India had first imposed a levy in 2022 at Rs 400 per kg or 20% of the value, whichever was higher, and raised it to Rs 600 per kg or 25% two years later. The HSN system is a global classification code covering more than 5,000 products.Mumbai, the country’s biggest hub for fashion jewellery manufacturing and trading, has been the hardest hit, with producers cutting production and workforce. Similar challenges are being faced in Rajkot in Gujarat, Singur in West Bengal, and Machilipatnam in Andhra Pradesh.“Certain customs clearing and forward agents are under-invoicing Chinese imported jewellery,” Mehta reiterated.Bharat Milee, owner of Malad-based Rajiv & Brothers, said, “China is way ahead of India in technology for producing low-cost jewellery at a mass scale. The manufacturers there have also received government support. We are unable to bring their technology and our focus is on quality products. Therefore, we are suffering now.”He added, as cited by ET, “Earlier, my manufacturing unit had pending orders for three months. Now the business has dwindled by 50%, forcing me to reduce my staff strength from 60 to 20. Many units are failing to give wages to their workers on time.”North Mumbai, home to numerous manufacturing units, is struggling for survival, while South Mumbai’s Bhuleshwar market, a key trading hub, remains dominated by Chinese supplies.