Gems Sector Pushes for Duty Cuts, GST Relief in Budget

The gems and jewellery industry seeks rationalising import duties on precious metals (gold, silver, platinum) and gemstones in advance of the Union Budget 2026-27, as per the latest reports by Money Control. Lower duty rates are considered one way to reduce manufacturing costs, thereby improving the industry's competitiveness in overseas markets, especially given the high prices of raw materials.

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The key demand from the industry from Union Budget 2026 is for simplified customs procedures to allow for quicker clearance of imported goods and increased digital processing of documents associated with importing and exporting.

The reduction of the current Goods and Services Tax (GST) on jewellery from 3% to either 1% or 1.25% would make jewellery affordable to consumers and encourage more formal sales.

The stakeholders in the jewellery industry are also looking for increases in demand due to Government Policies that promote employment in the industry.

Affordability and Domestic Measures

Regulated small-ticket EMI schemes for gold jewellery are targeted at price-sensitive buyers. Tourists can potentially maintain their luxury spending habits if GST refunds are available at airports.

Households hold large quantities of gold that could be recycled to reduce reliance on imported gold. Using formal channels to sell old gold and obtain new gold can help create value.

Flexibility in domestic sales by SEZs would help these operations fully utilise their production capacity.

Export and Infrastructure Support

Streamlined processes minimise supply chain bottlenecks on short timelines, while investment in the vocational training of artisans to support the export clusters through technology incentives increases productivity.

The ongoing global supply chain reconfiguration, along with increased trade barriers, elevates the need to be competitive numerically. Counteracting the recent increase in duties restores previously held positions in exporter marketplaces.