The European Union has reduced tariffs on gems and jewellery originating from India under its Generalised System of Preferences (GSP), which has been extended for the period from January 1, 2009 until the end of 2011.

More India business stories.Under GSP trade agreement, developing countries receive preferential access in the form of reduced tariffs for their goods entering the EU market. The European Commission said in a statement that jewellery, pearls, precious metals and stones from India would be eligible for the duty benefit under the scheme.

 However, Sanjay Kothari, chairman of the Gem and Jewellery Export Promotion Council, said, "The relaxation would not benefit the Indian industry much as the EU forms a very small part of our market. More India business stories.Most EU countries already offer duty-free entry for these products, so there is not much to gain." Kothari added the industry would certainly benefit in a large way if the USA restores Indian gem and jewellery products under its GSP system.