Amid a challenging global trade environment, India’s gems and jewellery sector has called for targeted duty rationalisation, procedural reforms and a reduction in GST in the Union Budget for 2026–27 to strengthen its global competitiveness.
The Gem and Jewellery Export Promotion Council (GJEPC), in its pre-Budget recommendations submitted to Finance Minister Nirmala Sitharaman, proposed a series of measures aimed at making Indian exports more cost-efficient and positioning India as a global hub for diamond trading and value discovery.
“The global gem and jewellery trade is undergoing a major transformation. With high US tariffs, evolving consumer preferences and shifting global supply chains, it is imperative that India maintains its competitive edge,” GJEPC Chairman Kirit Bhansali said.
Bhansali said the proposals focus on improving cost efficiency for exporters, strengthening operations in Special Economic Zones (SEZs), and enhancing policy frameworks that promote investment and skill development. With supportive reforms and a stable trade ecosystem, he added, India can not only withstand current global challenges but also lead the next phase of growth in the international jewellery market.
GJEPC flagged concerns over the existing 4 per cent Safe Harbour tax, calling it too high and a deterrent to international trade. The council urged the government to rationalise import duties on cut and polished diamonds as well as coloured gemstones to help Indian exporters remain globally competitive.
It also called for amendments to the Customs Act, 1962, to align customs procedures with the needs of a fast-evolving, export-oriented gems and jewellery industry. Suggested reforms include risk-based customs clearance, AI-enabled digital appraisals and self-certification for trusted exporters to improve speed, transparency and cost efficiency.
Separately, the All India Gem and Jewellery Domestic Council (GJC) also submitted its recommendations, seeking reforms in GST, hallmarking, direct taxes and overall industry practices.
“GST on gold and silver jewellery should be rationalised to 1.25 per cent from the current 3 per cent. This will help restore proportionality, reduce financial stress on households and expand the base of taxed transactions,” GJC Chairman Rajesh Rokde said.
The GJC further proposed an exemption from capital gains tax on the exchange of hallmarked jewellery, provided the sale proceeds are immediately reinvested in new jewellery, thereby maintaining continuity of asset holding.
The council also urged the government to operationalise the Tourist GST Refund scheme at the earliest by notifying the required rules and setting up digital claim and verification systems at major international airports. It suggested launching a phased pilot at Delhi, Mumbai and Bengaluru airports, where jewellery sales and foreign tourist footfall are the highest.
“Foreign tourists, particularly from the Middle East, Europe and the United States, face a tax-inclusive price disadvantage when buying jewellery in India compared to markets like the UAE and Singapore, where refunds are efficiently processed through automated airport systems,” Rokde said. He added that this results in lost opportunities, as foreign buyers either postpone purchases or buy jewellery abroad, leading to a loss of retail demand for India despite its competitive craftsmanship.