Indian jewelry manufacturers and exporters are foreseeing a major problem with US Government planning to remove generalized system of preference (GSP) on June 30.

GSP scheme, introduced in 1976, was designed essentially to encourage economic prosperity of the developing countries.

Jewellery exporters have already started bringing changes in the production of items to prevent prices from rising too high as this would otherwise make the ornaments far beyond the reach of average consumers.

Makers are also negotiating with the weight of gold and diamond caratage to maintain the current price level and attract buyers.

In spite of the problem being resolved between manufacturers of India and US importers, consumers are reluctant to invest in jewelry. Moreover, with GSP withdrawal and the appreciation of rupee, it seems impossible for Indian gems and jewelry industry to meet its expected target of 2-3 percent growth in exports.