Every respective industry is on the way to submitting recommendations with the intent to seek benefits from the Union Budget 2024-24 now the gems and jewelry industry seeks some sort of relief on the gold import duty to level the playing field between the regular and gray markets thus would result in improving export demand of the jewelry segment. Finance Minister Nirmala Sitharaman will present the Union Budget on February 1st.
“We assume the Union Budget 2024 will be a populist, people-friendly budget that would create proximity concerning the central elections next year. We don’t foresee extreme and radical changes in the policies from the upcoming budget. The focus will remain on bolstering Infrastructure, Make in India, EVs, power generation, etc”, the Chairman and Managing Director of PNG Jewellers Dr. Saurabh Gadgil said.
In addition, Gadgil said, “There has been a constant conversation between representatives of different trade bodies proceeding with the Government of India with regards to the pricing difference of gold between the gray market and the regular market that causes huge disparity and increases the occurrence of smuggling in gold”.
By considering all this information, the jewelry and gold industry experts hope the Government will cut duties on gold imports and rationalize the prices thus creating a level playing field between the regular market and the gray market.
According to the reports of the Gem and Jewellery Export Promotion Council (GJEPC) released in December 2022, the overall gem and jewelry exports declined by about $2.3 billion as compared to the previous year’s record of $2.9 billion. However, the exports dipped 0.73% to $28.6 billion in December followed by $28.8 billion recorded in the same period last year.
With this detail, Gadgil pointed out that the industry also seeks more clarity on the bullion exchange in GIFT City. He started, “There are a lot of policies that still need to be worked on and besides the exchange failed to attract buyers and sellers alike”.
Last year, Prime Minister Narendra Modi launched India International Bullion Exchange (IIBX), which is the country’s first International Bullion Exchange in GIFT city. The bullion exchange was introduced to facilitate efficient price discovery with the assurance of responsible sourcing and quality, except giving impetus to the financialization of bunches of gold in India.
Gadgil requested to set up a panel of experts to check the policy regulations from time to time thus resulting in good returns for both the jewelers as well as customers.
Industry experts expect the Union Budget will be growth-oriented which will enhance consumption, and focus on manufacturing which would result in robust GDP growth for the country.
With effect from July 1, 2002, gold imports increased by 5% to 12.5% from 7.5%. On the other hand, the total levies on gold are around over 18% followed by an import duty of 12.5%, coupled with a 2.5% Agri Cess, and an additional 3% GST as well. As per the report, India’s gems and jewelry exports dipped last year as imports tumbled due to a surge in local prices that impacted demand.
