Jewellery : Industry Seeks Tax Relief and Simpler Rules Ahead of Union Budget
Jewellery : As the Union Budget draws closer, representatives from India’s gems and jewellery sector are stepping up calls for policy measures aimed at reviving demand and ensuring steady growth. With consumers remaining cautious and international markets facing uncertainty, industry voices believe the upcoming Budget offers a critical opportunity to restore confidence and strengthen the sector’s foundations.
Leaders across the value chain say targeted fiscal support and regulatory clarity could help the industry navigate current challenges while safeguarding employment and exports. They argue that thoughtful reforms would not only support businesses but also encourage consumer spending at a time when discretionary purchases remain under pressure.
Push for Growth-Oriented Policy Measures
Industry participants are urging the government to prioritise reforms that promote long-term growth rather than short-term fixes. According to stakeholders, business-friendly policies can improve transparency and help narrow the long-standing divide between organised players and the informal segment.
Executives point out that clearer rules and predictable taxation would make it easier for companies to operate compliantly, while also improving trust among buyers. A more level playing field, they say, would encourage formalisation and strengthen the sector’s resilience.
Call for Lower GST on Gold Jewellery
One of the most frequently raised demands is a reduction in the Goods and Services Tax on gold jewellery. Industry leaders argue that the current rate adds to the financial burden on consumers, particularly during periods of economic uncertainty.
They believe that lowering the GST could directly stimulate demand by making jewellery purchases more accessible. Such a move, according to industry estimates, would also support artisans, retailers, and manufacturers who depend on consistent consumer spending for their livelihoods.
Import Duty Rationalisation and Affordability
Beyond GST, stakeholders are also seeking changes to gold import duties. High duties, they argue, increase costs across the supply chain and can inadvertently encourage illegal trade. A reduction in import levies is seen as a way to improve affordability while discouraging smuggling.
Industry analysts say that rationalising duties would align domestic prices more closely with global markets. This, in turn, could enhance transparency and ensure that legitimate businesses are not disadvantaged by parallel channels.
Need for Simpler Tax and Customs Frameworks
Another key concern highlighted by the sector is the complexity of existing customs and tax procedures. Multiple tariff slabs and detailed compliance requirements can tie up working capital and slow down operations.
Stakeholders are advocating for a simplified framework with clearer guidelines and fewer layers of compliance. They believe such reforms would ease operational bottlenecks, improve liquidity across the value chain, and allow businesses to focus more on growth and innovation.
Renewed Interest in Financial Gold Products
Alongside physical gold, there is growing interest in encouraging investment through financial instruments. Industry observers note that better incentives and improved digital access could help revive schemes such as Sovereign Gold Bonds. Similarly, tax clarity and benefits for gold exchange-traded funds are seen as important steps toward promoting financialisation.
By channeling demand into regulated financial products, experts say India could reduce pressure on physical imports while offering consumers more flexible investment options.
Employment, Exports, and Economic Contribution
The gems and jewellery sector remains one of India’s largest employers and a significant contributor to exports. Industry representatives stress that policy stability is essential to maintain this role, especially as global demand fluctuates.
They are calling for calibrated measures such as export facilitation, improved access to raw materials through designated zones, and rationalisation of taxes on making charges. Such steps, they argue, would enhance global competitiveness while supporting domestic consumption.
Outlook Amid Global Uncertainty
Despite ongoing global headwinds, industry leaders remain cautiously optimistic. They believe that measures to increase disposable income, maintain a stable tax regime, and support organised retail could help revive demand over the coming months.
With a balanced mix of tax relief, streamlined regulations, and consumer-focused initiatives, the gems and jewellery industry expects to continue playing a vital role in employment generation, export growth, and India’s broader economic development.