 "What does the jewellery sector expect from FM Sitharaman?")
Ahead of the Union Budget 2024, reports suggest that the jewellery industry is expecting possible reductions in duties on gold, silver, diamonds, and platinum.
The expectation is significant as it aligns with the wedding and festive season, a period typically marked by a strong demand for jewellery, according to a report by Mint.
India’s gem and jewellery sector relies heavily on imported raw materials such as gold, diamonds, silver, and coloured gemstones. This industry employs approximately 4.3 million people, contributes around 10 per cent to the nation’s merchandise exports, and is a key driver of economic growth, the report said.
The news report quoted Vipul Shah, chairman of Gem and Jewellery Export Promotion Council (GJEPC), as saying that the industry is currently encountering difficulties due to the geopolitical climate, the introduction of the beneficiation scheme, and challenges associated with sourcing rough diamonds. “I request the Hon’ble Finance Minister to introduce a safe harbour rule in SNZs, introduce the Diamond Imprest Licence, and reduce the import duty on gold, silver, and platinum bars to 4 per cent; and introduce duty drawback on exports of platinum jewellery to take advantage of India UAE CEPA...,” Shah said.
Union Budget 2024: The expectations
The GJEPC has proposed decreasing the import duty on gold bars (HS code 7108) from 15 per cent to 4 per cent. This adjustment is expected to release around Rs 982.16 crore in duty blockage, thereby providing the industry with additional working capital, the report said.
The Council has also recommended reducing the import duty on silver bars from 10 per cent to 4 per cent, and on platinum bars from 12.5 per cent to 4 per cent.
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The report said that to further develop and improve the Special Notified Zones (SNZs), the GJEPC has requested that the Centre allow internationally renowned diamond broking and trading firms, such as Bonas and I Hennig, to conduct their operations within these zones.
The GJEPC has called on the Centre to fulfill its long-standing request to allow the sale of rough diamonds in Special Notified Zones (SNZs) under the Safe Harbour Rule and to expand the types of entities permitted to operate within these zones, the report said.
Currently, only viewing sessions organised by mining countries occur in SNZs. The main goal of establishing SNZs was to provide easier access to rough diamonds, streamline procurement processes, and enable overseas diamond mining companies to sell their products directly to Indian manufacturers.