Ahead of Budget 2026, jewellery industry seeks GST cut and duty rationalisation
With Budget 2026–27 approaching, the gems and jewellery sector is asking for reforms including lower GST and customs duty changes to lift competitiveness and exports. Industry bodies argue policy tweaks are needed to manage global demand volatility and protect jobs.
Industry pitches a reform wishlist for Budget 2026–27
India’s gems and jewellery sector has urged the government to consider a set of reforms in the upcoming Union Budget 2026–27, including GST reduction, customs duty rationalisation and other policy changes aimed at strengthening exports and improving competitiveness. Stakeholders say the sector faces persistent pressure from global trade uncertainty, shifting consumer demand, and price volatility that complicates manufacturing planning.
The pitch is framed as both an export strategy and a jobs argument. Jewellery is a labour-intensive industry with deep supply chains—from cutting and polishing to design, retail and logistics—so even small changes in tax and duties can have outsize effects on cost structures, margins and hiring.
Why GST and duties are central
Industry representatives typically argue that high effective taxation reduces price competitiveness in overseas markets where buyers can switch suppliers quickly. They also contend that duty structures on inputs can distort incentives: higher duties on certain materials raise working capital needs and make it harder for exporters to quote stable prices, particularly when metal prices swing sharply.
Supporters of reform say that aligning import duty rates and fine-tuning GST can help the sector compete with hubs in East and Southeast Asia, while also discouraging informal trade. They also highlight that policy clarity matters for long-term investment in technology, compliance and skills, especially for smaller units.
What to watch as the Budget nears
In the run-up to the Budget, the key question is whether the government will prioritise export competitiveness, revenue stability, or a mix of both. Any changes—whether incremental or broad—will be assessed not just by exporters but also by domestic retailers, who often feel the impact through pricing, inventory and consumer demand.
If reforms are adopted, the sector expects improvements in predictability and margins, potentially translating into stronger export performance. If not, the industry is likely to continue pushing for phased measures, especially those that reduce friction without creating large revenue shocks.