India’s gem and jewellery industry is highly dependent on imported raw materials such as gold, diamonds, silver, and colored gemstones.
Vaamanaa Sethi
Published10 Jul 2024, 10:07 PM IST
Budget 2024: Gems and jewellery sector in India expects the government to take measures to revive exports in this sector.
The jewellery industry is eagerly anticipating potential duty cuts on gold, silver, diamonds, and platinum in the upcoming 2024-25 Budget, to be presented by Finance Minister Nirmala Sitharaman on July 23.
This expectation is particularly noteworthy as it coincides with the wedding and festival season, a time traditionally associated with high demand for jewelry.
India’s gem and jewellery industry is highly dependent on imported raw materials such as gold, diamonds, silver, and colored gemstones. This vibrant sector supports around 4.3 million jobs, accounts for roughly 10% of the country's merchandise exports, and plays a crucial role in driving overall economic growth.
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“The Indian gems and jewellery industry contributes around 10% to India’s total merchandise exports. However, the industry is currently facing some challenges due to the geopolitical scenario, the emergence of the beneficiation scheme, and issues related to rough diamond sourcing. Against the backdrop of the macroeconomic scenario, I urge the government to take measures to revive exports in this sector. I request the Hon’ble Finance Minister to introduce a Safe Harbour rule in SNZs, introduce the Diamond Imprest License, and reduce the import duty on gold, silver, and platinum bars to 4%; and introduce duty drawback on exports of platinum Jewellery to take advantage of India UAE CEPA. These measures are crucial to give a competitive edge to our players and boost exports and at the same time generate employment in the sector," said Vipul Shah, Chairman of Gem & Jewellery Export Promotion Council (GJEPC).
Here are some of the key recommendations made by GJEPC for the upcoming Budget 2024-2025 -
Reduction in import duty on precious metals to 4%
The Council has also proposed reducing the import duty on Gold Bars (HS code 7108) from 15% to 4%. This change is expected to unlock approximately Rs. 982.16 crore in duty blockage, providing the industry with increased working capital. With more working capital available, the untapped export potential for gold jewellery could be realized, aiming to achieve at least US$2 billion of the US$11 billion potential over a medium period of 2 years.
Additionally, GJEPC has advocated for lowering the import duty on Silver Bars from 10% to 4%, and reducing the import duty on Platinum Bars from 12.5% to 4%.