Interim Budget fails to address key demands put forward by the gems and jewellery industry

Leading industry players had rooted for import duty reductions across gold, silver, platinum and diamonds, besides increasing the PAN card transaction limit in view of rising gold prices

Mumbai: Presenting the Interim Budget 2024-25 on February 1, 2024, Finance Minister Nirmala Sitharaman declared multiple plans by the Government to make India a developed nation by 2047, and eradicate systemic inequalities, but did not announce any change to the existing import duties, reduction of which was among the key demands put forward by the gems and jewellery industry. Thus, the Budget elicited mixed reactions from the industry, with some players supporting the Government’s long-term vision, and others expressing disappointment that no steps have been taken to address pressing issues.    

While welcoming the FM’s announcement to make our country ‘Viksit Bharat’ by FY2047, Vipul Shah, Chairman of the Gem & Jewellery Export Promotion Council (GJEPC) said that the recently announced India-Middle East-Europe Economic Corridor is a strategic and economic game-changer for gem and jewellery exporters in India and elsewhere. “Just as the CEPA trade agreement has increased jewellery exports to the Middle East, we welcome bilateral trade agreements with European countries and others to boost gem & jewellery exports. Before the FM presents the full Budget in July, the Council seeks the inclusion of gems & jewellery artisans and craftsmen in the PM-Vishwakarma Yojana that provides end-to-end support. Of the increased outlay of Rs 11.11 lakh crore announced by the FM, we seek allocation towards modern infrastructure such as jewellery parks for boosting gem & jewellery exports from India,” he said. As more than 80% of the gem & jewellery industry comprises MSMEs, he urged the FM to include Government schemes for gems and jewellery that will help the sector compete globally, including skilling and training for MSMEs.

T S Kalyanaraman, Managing Director, Kalyan Jewellers welcomed the PM Vishwakarma Yojana, and said it is playing a critical role in empowering India’s artisan community. “With benefits extending across 18 trades, it symbolizes the Government of India’s holistic approach towards preserving traditional craftsmanship and contributing significantly to the nation’s economic fabric,” Kalyanaraman said. He added that the ‘First Develop India’ (FDI) initiative, geared towards encouraging foreign partnerships, exemplifies a collaborative spirit towards economic progress.

Amit Pratihari, Vice President, De Beers Forevermark said the interim Budget conveys an overall positive outlook, considering that the current robust economic conditions in the country have led to increased disposable income, thereby directly boosting consumer purchasing power. “This favourable shift is evident in the jewellery industry, where consumers are inclined towards acquiring items that hold meaning and value, such as natural diamonds. The Government’s initiative to promote women entrepreneurship is also poised to inspire numerous women to become self-sufficient, fostering self-purchasing capabilities, creating a brighter future,” he commented. 

Colin Shah, MD, Kama Jewelry, pointed out the Government’s focus on inclusive and decentralized economic growth that will position India among the supremacy of developed nations. “The recently announced India-Middle East-Europe economic corridor will act as a key enabler that will help Indian gems & jewellery exporters establish new trade relations in the overseas markets,” said Shah. 

“The Budget focuses on inclusive growth, prioritizing MSMEs and gem exports. It emphasizes skill development, supports women entrepreneurs, and targets youth, addressing MSMEs’ personnel needs. The interim Budget empowers all pillars of Viksit Bharat – Yuva, Garib, Mahila and Kisan – guaranteeing India’s development by 2047. Overall, it’s a progressive and promising Budget with a vision for India’s development,” said Saket Keshri, Director, Ratnalaya Jewellers. 

Sachin Kothari, Director, Augmont Gold for All, said that bullion industry stakeholders had a lot of expectations from the Government to simplify and reduce the duties structure of the gold trade in this Budget and solve the challenges they faced. “None of these issues and challenges were addressed in this Interim Budget. Bullion market participants have forwarded these hopes and expectations for the final Budget, which will be announced after the elections this year,” he added. 

Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Limited (RSBL), agreed with this stand. “The wishlist from the bullion industry was very long, such as reducing 15% import duties on precious metals, reducing 3% GST, exempting capital gain tax on gold jewellery sales, GST refunds to NRIs, simplifying TCS and TDS rates, etc. All taxes and duties remain in status quo until the next Budget,” Kothari stated.

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