Budget 2026, GJPC, Budget Demand: The Gem & Jewellery Export Promotion Council (GJEPC) has submitted a detailed set of recommendations for upcomig budget 2026 to Honourable Finance Minister, Nirmala Sitharaman, calling for a targeted policy intervention to strengthen India’s gem and jewellery market amid this challenging global trade environment.
India’s gem and jewellery exports, valued at USD 28.7 billion in FY 2024–25, remain a critical contributor to foreign exchange earnings and employment generation. However, the industry is navigating a complex landscape shaped by geopolitical uncertainties, the impact of U.S. tariff actions, and subdued consumer demand in key international markets.
Against this backdrop, GJEPC has stressed the urgency of policy support to help Indian manufacturers and exporters remain cost-competitive while diversifying into new markets.
As part of its pre-Budget submission, the Council has urged the government to consider duty rationalisation and procedural reforms that would create a more enabling ecosystem for sustainable growth, innovation, and value addition across the gem and jewellery value chain.
Commenting on the proposals, Kirit Bhansali, Chairman, GJEPC, said, “The global gem and jewellery trade is undergoing a major transformation. With high U.S. tariffs, evolving consumer preferences, and shifting global supply chains, it is imperative that India maintains its competitive edge. Our pre-Budget proposals are focused on making Indian exports more cost-efficient, strengthening SEZ operations, and improving policy frameworks that encourage investment and skill development. A key objective is also to establish India as a global diamond trading hub, complementing its position as the world’s leading cutting and polishing centre. With supportive reforms and a stable trade ecosystem, India can not only weather current global challenges but also lead the next phase of growth in the international jewellery market.”
Key Recommendations Proposed by GJEPC are as follows:-
1. Liberalised Taxation for Rough Diamond Trading
Over 90% of the world’s rough diamonds are cut and polished in India. Yet, India lacks a global trading hub comparable to Antwerp or Dubai. To bridge this gap, GJEPC has recommended a liberalised and predictable taxation regime for foreign mining companies operating in Special Notified Zones.
The current 4% Safe Harbour Tax is considered too high and is discouraging international trading activity. So, GJEPC has proposed a model inspired by Belgium’s ‘Carat Tax’ to position India as a global diamond trading and value discovery centre.
Also, GJEPC has asked for permission for reputed global brokers to operate in India has also been sought to improve transparency, liquidity, and international participation.
2. Duty Rationalisation on Cut and Polished Stones.
GJEPC has urged rationalisation of import duties on cut and polished diamonds and coloured gemstones to help Indian exporters remain globally competitive. Semi-processed diamonds imported from mining countries are currently classified as finished goods and attract a 5% Basic Customs Duty, increasing costs.
Similarly, restrictions and high duties imposed by rough gemstone–producing countries force Indian jewellers to import finished stones, further weakening competitiveness.
The Council has recommended reducing the duty on cut and polished diamonds and gemstones to 2.5% and abolishing duties on rough gemstones to sustain manufacturing, employment, and export growth.
3. Ad-Valorem Duty Drawback for Gold and Silver Jewellery
To address volatility in precious metal prices, GJEPC has proposed replacing the fixed-rate duty drawback mechanism with an ad-valorem, value-based system. The existing structure reimburses only 75–80% of duties paid, resulting in consistent losses for exporters, especially with gold prices ranging between ₹99,000 and ₹1,25,000 per 10 grams. An ad-valorem system would ensure proportionate refunds, offering predictability and financial stability across the export value chain.
4. Inclusion of Platinum and Gold Articles in the Duty Drawback Scheme
The Council has also recommended extending duty drawback benefits to platinum jewellery and gold articles, particularly for Domestic Tariff Area exporters. While platinum jewellery exports have grown nearly 17 times over the past five years—largely from SEZs—DTA units remain disadvantaged.
Including these categories under the scheme would create a level playing field, encourage diversification, and support India’s emergence as a global hub for platinum and high-end gold jewellery manufacturing.
5. Tax Refund Scheme for Foreign Tourists
To position India as a premier luxury shopping destination, GJEPC has proposed a comprehensive tax refund scheme for foreign tourists purchasing jewellery.
Currently, only the GST component is refundable, while Basic Customs Duty and AIDC remain embedded in prices. A broader refund mechanism, similar to those in Dubai and Singapore, would enhance price competitiveness, boost tourism-led retail demand, and strengthen Brand India in the global luxury market.
6. Enhancing SEZ Flexibility for Resilience and Growth
With global demand fluctuations impacting export performance, GJEPC has sought greater operational flexibility for SEZ units. Proposals include permitting reverse job work for domestic orders during export slowdowns, allowing clearance of unsold inventory into the Domestic Tariff Area upon payment of duty, and simplifying logistics through a “Bill to Ship to” mechanism. These measures aim to prevent idle capacity, safeguard employment, and strengthen India’s manufacturing base.
7. Amendment of the Customs Act and Simplification of Procedures
The Council has urged amendments to the Customs Act, 1962, to align processes with the needs of a fast-evolving export-driven industry. Recommended reforms include risk-based customs clearance, AI-enabled digital appraisals, self-certification for trusted exporters, and uniform Standard Operating Procedures across ports. Such measures would improve speed, transparency, and cost efficiency while reducing procedural bottlenecks.
8. Extension of Duty Exemption on Seeds for Lab-Grown Diamonds
Recognising India’s global leadership in lab-grown diamonds, GJEPC has recommended extending the duty exemption on imported LGD seeds beyond March 2026. As the industry continues to depend on high-quality imported seeds, sustaining this exemption is seen as critical for maintaining cost competitiveness, boosting domestic production, and preserving India’s leadership in the rapidly expanding global LGD market.
Through these structured pre-Budget recommendations, GJEPC has presented a clear and actionable agenda to strengthen India’s gem and jewellery sector—balancing immediate resilience with long-term ambition to lead the next phase of global industry growth.
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