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The Gem & Jewellery Export Promotion Council (GJEPC) has submitted its pre‑Budget recommendations to Finance Minister Nirmala Sitharaman, outlining a series of fiscal and regulatory reforms designed to strengthen India’s gems and jewellery exports. The proposals aim to enhance competitiveness, encourage investment, and establish India as a global diamond trading and value‑discovery hub.
India’s gem and jewellery sector — valued at USD 28.7 billion in exports in FY 2024–25 — plays a central role in foreign exchange earnings and employment generation but faces geopolitical uncertainties, tariff challenges and slowing global demand in key markets.
Key Calls for Duty Rationalisation and Tax Reforms
A central plank of GJEPC’s recommendations is rationalising import duties on key inputs such as cut and polished diamonds and coloured gemstones, which currently attract a Basic Customs Duty that erodes export margins. The council has suggested reducing these duties to 2.5 % and eliminating duties altogether on certain rough gemstones to lower manufacturing costs and boost global competitiveness.
To support exporters at a time of high tariff barriers in major markets like the United States, GJEPC has also proposed replacing the existing fixed‑rate duty drawback system with an ad‑valorem mechanism that would offer refunds proportionate to duties paid, helping firms manage volatility in precious metal prices more effectively.
Additionally, inclusion of platinum jewellery and gold articles under the Duty Drawback Scheme was urged to create parity between Special Economic Zone (SEZ) units and Domestic Tariff Area (DTA) exporters, encouraging diversification and broader participation in global markets.
Customs, SEZ and Ease‑of‑Doing‑Business Reforms
Beyond duty cuts, the council’s proposals stress the need to amend the Customs Act, 1962 to align procedures with the requirements of a dynamic export‑driven industry. Suggested reforms include:
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Risk‑based customs clearance for faster processing
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AI‑enabled digital appraisals
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Self‑certification for trusted exporters
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Uniform compliance procedures across all ports
These measures are intended to reduce procedural bottlenecks, lower compliance costs and improve ease of doing business for exporters.
GJEPC also advocated for enhanced operational flexibility in SEZs, including allowing SEZ units to undertake “reverse job work” during export slowdowns and enabling unsold inventory to be cleared into the DTA, thereby helping to manage excess capacity and protect jobs.
Boosting Global Trade Positioning and Tourism Retail
In a bid to strengthen India’s standing as a leading destination for luxury jewellery, the council has proposed a comprehensive tax refund scheme for foreign tourists — refunding all applicable taxes (not just GST) on jewellery purchases, similar to models in Singapore and Dubai. Such mechanisms are seen as key to bolstering tourism‑linked retail and reinforcing “Brand India” on the global stage.
Drawing inspiration from international models like Belgium’s “Carat Tax,” GJEPC seeks a predictable tax regime to attract global mining firms and brokers to operate from India, helping establish the country as a diamond trading hub comparable to Antwerp or Dubai.
Industry Support and Broader Calls for Reform
Parallel industry voices, including the All India Gem and Jewellery Domestic Council (GJC), have urged reduction in GST rates on gold and silver jewellery and reforms to direct tax structures to enhance affordability and expand the taxed base. Calls have also been made to operationalise the Tourist GST Refund Scheme with digital claim mechanisms at major international gateways.
As Budget 2026–27 preparations continue ahead of the February 1, 2026 presentation, the gems and jewellery industry’s proposals reflect a strategic attempt to safeguard export momentum, bolster global competitiveness and stimulate growth across the value chain.
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