Jewellery industry seeks GST cuts and duty rationalisation ahead of Union Budget 2026–27

Pre-budget pitch from a major export sector

India’s gems and jewellery industry has intensified its pre-Budget lobbying, asking for a combination of GST cuts, customs-duty rationalisation and policy reforms as the government prepares the Union Budget 2026–27. The sector argues that cost pressures, shifting trade dynamics and tighter global demand conditions make it important to reduce frictions in taxation and import duties that affect manufacturing and export competitiveness.

Industry representatives, including the Gem and Jewellery Export Promotion Council (GJEPC), have submitted a memorandum to Finance Minister Nirmala Sitharaman outlining measures intended to lower input costs, streamline trade rules and strengthen India’s role in global value chains—particularly in diamonds, gold jewellery and related segments.

What the sector wants in Budget 2026–27

The core request is tax and duty rationalisation. The industry has signalled that GST rates and compliance burdens can influence working capital cycles for exporters and small manufacturers. It has also sought a clearer, more predictable customs regime to reduce uncertainty in importing raw materials and intermediates used in processing and manufacturing.

Beyond headline tax rates, trade-facing sectors typically push for procedural simplicity—faster clearances, less duplication of documentation and more stable rules—because delays can break delivery timelines and raise costs, particularly when firms compete against hubs with leaner logistics and trade administration.

Why global headwinds matter

Jewellery exports are sensitive to consumer demand cycles in key markets and to global financing conditions. When global demand softens or becomes volatile, exporters often seek domestic policy support that can cushion margins. Industry bodies have argued that India can protect market share by ensuring taxes and duties do not make locally manufactured products structurally more expensive than competing supply centres.

The pitch also reflects the sector’s scale: it employs large numbers across manufacturing clusters and contributes significant export earnings. As a result, policy tweaks—such as duty changes or compliance simplification—can have outsized effects on the breadth of firms, from large exporters to micro and small units.

What to watch for in the Budget

• Any GST rate change or compliance simplification specific to gems and jewellery.
• Customs-duty adjustments for raw materials and intermediates used in jewellery making.
• Export competitiveness measures and trade facilitation steps that shorten turnaround times.
• Signals on long-term policy stability that can influence investment and job creation.

The industry’s memo positions the Budget as an opportunity to reduce structural costs and support export performance, particularly at a time when global trade conditions remain uncertain for discretionary categories like jewellery.