Ahead of Budget 2026-27, jewellery industry seeks GST cut, customs reforms, faster clearances
India’s gems and jewellery sector has urged the Centre to rationalise GST, reform customs procedures and recalibrate import duties to boost export competitiveness before Union Budget 2026-27. Industry bodies say changing global trade conditions and higher tariffs in key markets make lower friction and clearer policy frameworks critical for keeping India strong in diamonds and jewellery value chains.
What the industry is asking from Budget 2026-27
With Union Budget 2026-27 approaching, India’s gems and jewellery industry has submitted a set of proposals aimed at reducing costs, speeding up trade processes and improving export competitiveness. The Gem and Jewellery Export Promotion Council (GJEPC) said the sector needs a mix of GST rationalisation, customs reforms and policy updates to stay resilient amid shifting global supply chains and changing consumer demand.
The GJEPC’s memorandum to Finance Minister Nirmala Sitharaman argued that the global gem and jewellery market is undergoing a major realignment. The council said that high tariffs in the US and broader trade headwinds increase the urgency for India to protect its position as a key hub for diamonds, jewellery manufacturing and value discovery.
Customs efficiency and duty rationalisation
Among specific asks, the council called for rationalisation of import duties on cut and polished diamonds and coloured gemstones. It also sought changes to the Customs Act, 1962, to align procedures with the needs of a fast-moving export sector that depends on time-sensitive shipments and predictable clearances.
The recommendations include risk-based customs clearance, AI-enabled digital appraisal systems, and self-certification for trusted exporters. The underlying message: India’s competitiveness in gems and jewellery is not only about labour and skill, but also about reducing friction in cross-border movement of high-value goods.
Domestic council pushes GST relief and other reforms
Separately, the All India Gem and Jewellery Domestic Council (GJC) has also made representations focused on GST rationalisation, hallmarking and direct tax issues. One proposal seeks a reduction of GST on gold and silver jewellery to 1.25% from 3%, arguing this would restore proportionality and broaden compliance by making transactions less financially stressful for households.
The domestic council also flagged other ideas such as tax treatment around exchanges of hallmarked jewellery and suggestions linked to a Tourist GST Refund mechanism. Together, these proposals aim to support both export-driven businesses and the vast domestic retail ecosystem.
What it could mean for the economy
If the government accepts even part of the proposals, the most immediate impact would likely be on working capital cycles, compliance, and turnaround time for exporters—key factors in a sector where margins can be sensitive to delays and global price swings.
Policy decisions in the Budget will show whether the government prioritises such sector-specific relief and process upgrades as tools for export growth, formalisation and job creation, particularly in clusters where jewellery manufacturing supports large numbers of skilled and semi-skilled workers.