Giving a major boost to the gems and jewellery industry, Finance Minister Nirmala Sitharaman reduced the custom duty on gold and silver to 6% from 15%. The duty on platinum has also been reduced to 6.4% from 15.4%.
Furthermore, the Finance Minister introduced safe harbour rates for foreign mining companies selling raw diamonds in India. This initiative aims to attract more raw diamond imports, supporting the local diamond cutting and polishing industry, and further boosting the economy.
GJEPC all praise for the Budget
Reacting to the Budget, GJEPC chairman Vipul Shah said, “The FM’s acceptance of GJEPC’s long-pending demand for sale of rough diamonds in SNZs through the Safe Harbour Rule is a game-changer for the industry, putting India on equal footing with global centres like Belgium and Dubai.”
Explaining the benefits of such a move, Shah added, “Previously, foreign mining companies were deterred from selling in India due to being classified as permanent establishments, which subjected them to complex tax regulations. The new Safe Harbor Rule simplifies these tax implications, allowing foreign mining firms to operate in India without the risk of being considered permanent entities. This change is anticipated to attract more foreign investment and foster a more competitive market, enhancing the availability of rough diamonds for Indian buyers.”
He also welcomed the equalization of duty across all segments, including online portals. “Prior to this, the gem and jewellery industry faced prohibitive duties on online transactions, which pushed businesses to collaborate with foreign companies. The new equalization duty levels the playing field, enabling domestic companies to leverage online platforms effectively. This shift is expected to drive digital transformation within the industry, expanding market reach and enhancing customer engagement through e-commerce,” he said.
The duty reduction is part of the government’s broader strategy to enhance domestic value addition by making raw materials more affordable, thus encouraging local production. The lowered duties are expected to benefit the domestic jewellery and manufacturing industries by reducing the cost of importing these precious metals.
These measures are also anticipated to make Indian products more competitive in the global market, stimulate growth in the jewellery sector, and create more employment opportunities. The government hopes that reducing customs duties will help curb smuggling by narrowing the price difference between official import rates and black market prices.
Overall, the revised customs duties and the introduction of safe harbour rates for raw diamonds are expected to have a positive impact on both manufacturers and consumers, potentially leading to lower prices and a wider variety of products in the market.
