Budget 2025: What India's $85B jewelry industry expects this time
What's the story
India's jewelry sector, worth an impressive $85 billion, is looking forward to Finance Minister Nirmala Sitharaman's seventh budget presentation on February 1.
Although 2024 has been a tough year with exports to US and China falling, the industry witnessed a boom in IPOs and domestic demand.
The sector has now prepared an exhaustive budget wishlist, including demands for duty cuts and regulatory simplifications.
Duty cuts
Jewelry sector seeks further reduction in import duties
The India Bullion and Jewelers Association has proposed to further reduce the import duty on gold and silver to 3%, from the current 6%.
The suggestion comes after last year's budget decision to slash these duties from 15% to 6%, which boosted demand significantly.
The association believes an additional cut would make India's jewelry exports more competitive globally.
Regulatory needs
Industry calls for regulation of burgeoning digital gold market
The jewelry sector is also demanding regulatory oversight of the fast-growing digital gold market.
This mode of investment, which enables people to buy gold online in small denominations and trade it for physical jewelry once a sufficient amount has been accumulated, has grown significantly in the last few years.
The World Gold Council is strongly backing this demand for regulation.
The digital gold market has expanded from 45 tons in 2020 to 70 tons in 2024.
Trade platform
Jewelry industry advocates for enhanced role of IIBX
Since its launch in 2022, the India International Bullion Exchange (IIBX) has emerged as an important platform for storing and trading gold and its derivatives.
Now, the jewelry industry is pushing for an enhanced role for the IIBX in India's gold imports.
This includes special benefits such as lower import duties and exclusive rights to deal with all bullion imports and exports.
Hallmarking push
Sector urges mandatory hallmarking for silver jewelry
The jewelry industry is also calling on the government to make hallmarking mandatory for silver jewelry.
Hallmarking, which officially records the content of precious metals in jewelry and verifies their purity, was made compulsory for gold jewelry in 2021.
However, it has been implemented inconsistently across various districts in India.
The sector believes extending this requirement to silver would further protect consumers from potential fraud.
EMI appeal
Seeking reversal of EMI ban on purchases
The jewelry industry is also urging the Reserve Bank of India (RBI) to lift its ban on easy monthly installments (EMIs) for gold and silver jewelry bought through credit cards.
The ban, which was first imposed in 2013 and reiterated in 2018, has been a contentious issue for the sector.
The industry believes lifting the ban would significantly increase sales and spur growth.
Platinum promotion
Jewelry sector pushes for platinum promotion and diamond campaigns
The Gems and Jewelry Export Promotion Council (GJEPC) has proposed an advanced ecosystem to promote platinum jewelry, which has witnessed rising demand.
The industry is seeking a reduction in import duty on platinum bars from 12.5% to 4% and the introduction of duty drawbacks on exports of platinum jewelry.
The council is also seeking co-funding from the Finance Ministry for promotional campaigns to boost global diamond demand and prices, which dipped in 2024 due to weak demand in major markets.