Retail Budget 2023: Jewellery industry shares mix reactions

NEW DELHI: Top jewellery retailers of the country shared mixed reactions to Union Budget 2023 announced today by Finance Minister Nirmala Sitharaman. She announced a hike on the basic customs duty on articles made out of silver dore bars and gold bars. As an impact, gold, silver and diamonds are expected to get costlier.

While applauding a well-balanced Budget, All India Gem and Jewellery Domestic Council (GJC) in a statement said, “..the Gems & Jewellery Industry’s critical concerns are not addressed in the Union Budget 2023-24.”

“The reduction in Gold Custom Duty in this Budget was our big expectation, which has severely hampered the industry and encouraged smuggling and grey market,” the statement read adding that the move to bring silver dore bars custom duty at par with gold and platinum will adversely affect the masses.

While saying that they need to clearly analyse the impact of the proposals made in the budget, MP Ahammed, chairman, Malabar Group (Malabar Gold & Diamonds) said, “As far as the industry is concerned, we expected a reduction in the customs duty of gold. Unfortunately, that did not happen. Instead of reducing duty on gold, the FM chose to hike the duty of silver.”

Gem & Jewellery Export Promotion Council (GJEPC) welcomed the move to increase the duty on articles of gold/silver and platinum from 20 per cent to 25 per cent. However, it said that it is clarifying on the import duty on findings which are the raw materials in character for the manufacture of jewellery.

Commenting on the rationalising of import duty on silver, GJEPC said that it will have a net effect of the increase of around 5 per cent duty at the import level for silver resulting in an increase in price for silver products domestically.

Contrary to the above sentiment, Suvankar Sen, MD & CEO, Senco Gold & Diamonds said that the hike in customs duty won’t have an impact on its sales. He added, “The impact of budget 2023 will have negligible impact on those who are making gold jewellery in India itself.”

Sen explained that the import of dore is a smaller percentage of total gold imports. As only dore duty got increased by 2.5 per cent, that may have an impact on the business of local refineries. Further, he added that tax on jewellery import has been increased which will again have no impact on Senco and most of the jewellery industry as members don’t import gold jewellery.

Ramesh Kalyanaraman, executive director – Kalyan Jewellers too shared a similar thought and said, “The increase in the import duty of silver will not have a significant impact for us as our primary focus is on the gold, diamond and other precious stone studded jewellery.”

Announcements on lab-grown diamonds welcoming

Finance Minister Sitharaman announced a reduction in the basic customs duty on seeds used to manufacture lab-grown diamonds to zero from 5 per cent. She also said that a Research & Development grant will be offered to one of the IITs for 5 years.

GJEPC welcomed the announcement adding that it will ensure India’s end-to-end world leadership in rough-to-finished lab-grown diamond and jewellery manufacturing.

The GJC on the other hand said that while the R&D grant will be provided to  one of the IITs for the development of Lab Grown Diamond seeds and machines, the other sectors of the industry have been ignored.

Without commenting on lab-grown diamonds, Amit Pratihari, VP, De Beers Forevermark said that for natural diamonds, the brand has seen an encouraging trend over the past few months with pricing also remaining steady. “As customers continue to value what is natural and genuine, diamonds will always be in demand,” he added.

Courtesy: Economic Times