Exporters Advocate for Reduced Import Duty on Gold, Silver, Platinum to 4%

Gems and jewellery exporters have requested a reduction in import duties on gold, silver, and platinum bars to 4 per cent in the upcoming Budget. During a pre-budget meeting with Finance Minister Nirmala Sitharaman, the Gems and Jewellery Export Promotion Council (GJEPC) highlighted the industry's contribution of around 10 per cent to total merchandise exports.

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Challenges Faced by the Industry

The GJEPC pointed out that the industry is currently grappling with challenges due to geopolitical tensions, the emergence of beneficiation schemes, and issues related to sourcing rough diamonds. These factors are impacting the sector's performance and competitiveness.

To address these challenges, the council urged the government to take measures aimed at reviving exports in this sector. One of their key requests was to introduce the sale of rough diamonds in Special Notified Zones (SNZs).

Proposed Measures for Boosting Exports

The council also recommended reducing import duties on gold, silver, and platinum bars to 4 per cent. Additionally, they suggested introducing duty drawbacks on platinum jewellery exports to leverage the India-UAE Comprehensive Economic Cooperation Agreement.

These measures are seen as essential for providing a competitive edge to Indian players and boosting exports while generating employment in the sector. The GJEPC emphasized that these steps would help in releasing duty blockages and increasing working capital for the industry.

Impact on Working Capital

The GJEPC noted that reducing import duties on precious metals would release around Rs 982.16 crore in duty blockages. This would result in more working capital being available for the industry, which could help realize untapped export potential for gold jewellery worth at least USD 2 billion over two years.

The council has specifically sought a reduction in import duty on gold bars from 15 per cent to 4 per cent. They also requested a cut in import duty on silver bars from 10 per cent to 4 per cent and on platinum bars from 12.5 per cent to 4 per cent.

Expanding SNZs Scope

To further extend and expand the scope of SNZs, the GJEPC suggested allowing globally recognized diamond broking and trading houses. This move is expected to enhance the industry's global competitiveness and attract more international players.

These recommendations aim to provide a much-needed boost to the gems and jewellery sector, ensuring its growth and sustainability amidst current challenges. The council believes that implementing these measures will significantly benefit the industry and contribute to India's overall economic growth.

The GJEPC's proposals highlight the need for policy changes that can help the industry overcome its current hurdles and tap into its full potential. By addressing these issues, the government can support one of India's key export sectors and drive economic progress.