In her final outing before the polls, Finance Minister Nirmala Sitharaman presented a budget which held no major surprises. Notably, the Budget 2024-25 did not address the critical concerns of the gems and jewellery Industry. There is no reduction in the custom duty on gold. In fact, the government has increased the import duty on gold and silver findings, as well as on precious metal coins, from 11% to 15%, effective January 22. This adjustment aligns these items with the duties on gold and silver bars.

Reacting to the budget, Vipul Shah, chairman, GJEPC, said, “The Gem & Jewellery Export Promotion Council welcomes Union Finance Minister Nirmala Sitharaman’s announcement to make our country Viksit Bharat by FY2047. For gem and jewellery exporters, the recently announced India-Middle East-Europe Economic Corridor is a strategic and economic game-changer for India, and others. 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 and jewellery exports.”

It may be recalled that GJEPC had sought  the Safe Harbour rule for the sale of rough diamonds in Special Notified Zones, introduction of the Diamond Imprest Licence, a reduction in import duty on cut and polished diamonds to 2.5%, and a reduction in import duty on gold/silver/platinum bars to 4%. It had also asked for the inclusion of gem and jewellery artisans and craftsmen in the PM Vishwakarma Yojana.

“We eagerly await the FM’s detailed strategy for Amrit Kal, and an economic export policy with Sustainable Reform, Perform and Transform for the next five years of unprecedented development,” Shah added.

Industry disappointed

Expressing his dissatisfaction with the Budget, Anil Kataria, Director of D P Abhushan Jewellers, MP, said, “Honestly, we had a lot of expectations from this Budget, sadly none were fulfilled. The Budget hasn’t brought any positive or remarkable changes for business, industry or the common man. A rationalized tax structure should have been brought about long back. The lack of such a structure results in several wrong business tactics undertaken by miscreants and small businesses in rural areas.”

Pratap Kamath of Abaran Timeless Jewellery, Bangalore, said, “The Budget is lukewarm. It has missed the opportunity to reduce custom duties, which could have curbed gold smuggling, and impacted retail prices. The reduction in customs duty on gold, which has been a long-standing need, has not materialized. Instead, the duty on silver, gold, and platinum has been equalized at a steep 15%, adversely affecting the gems and jewellery sector's retail trade.”

“What can one expect from an interim Budget? It was alright. Unfortunately, despite persistent efforts to emphasize the necessity of reducing customs duty on gold, these appeals went unheard. The government seemed focused on preserving its revenue without any worry about the smuggling of gold which goes on across the country. Though, after the actual budget is presented, let us hope that there are some amends here,” said Anantha Padmanabhan of NAC Jewellers, Chennai.

Expectations from the bullion industry for a simplified and reduced duty structure in this budget were also not met. Sachin Kothari, Director, Augmont Gold For All, said, “Bullion Industry stakeholders had a lot of expectations from the government to simplify and reduce the duty structure of the gold trade in this budget and solve the challenges they faced. However, none of these issues and challenges were addressed in this interim budget.”

Added Ravindranath Davanam of Davanam Jewellers, Bangalore, “The Government is not reducing customs duty on gold. We all sent several request letters to the PMO, the finance minister’s office, and repeatedly explained the gravity of the matter, yet it remained unaddressed. In fact, they increased the duty on gold, which is really sad.”

Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited , summed up the industry sentiment, stating, “The wish list from the bullion industry was very long. All taxes and duties remain in status quo until the next budget.”