The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, has received an enthusiastic response from the jewellery industry, particularly due to the proposed reduction in the basic customs duty on gold, silver, and platinum. The finance minister announced the reduction of customs duties on gold and silver to 6 per cent and on platinum to 6.4 per cent, a move aimed at enhancing domestic value addition in gold and precious metal jewellery.
Previously, gold and silver imports were subject to a basic customs duty of 10 per cent, in addition to an Agriculture Infrastructure and Development Cess (AIDC) of 5 per cent, bringing the total to 15 per cent. This reduction in customs duty addresses long-standing concerns within the gems and jewellery industry, which had argued that high import duties led to increased smuggling and reduced demand for gold and jewellery.
MP Ahammed, Chairman of Malabar Group, expressed gratitude towards the finance minister for addressing the industry’s demands. "The reduction in import duty on gold has been a long-standing demand for gold retailers. This move not only relieves consumers but is also expected to boost gold demand in the country and create jobs for artisans. High import duty often leads to increased smuggling of gold, hampering the growth of the organised retail gold trade and resulting in revenue losses for the government. The duty reduction will drastically cut down gold smuggling, thereby curbing illegal trade and enhancing tax revenues," Ahammed noted.
Sachin Kothari, Director of Augmont - Gold For All, also welcomed the reduction in customs duties from 15 per cent to 6 per cent. "This announcement is a welcome step for the bullion industry. Bullion market participants were expecting a 5 per cent cut in duties, but FM has announced a 9 per cent cut, which is commendable. Indian consumers will now be able to buy gold at a 9 per cent cheaper rate, boosting physical demand. MCX Gold prices have already fallen significantly as a reaction to this announcement and are expected to stabilise further," Kothari stated.
Premjit Sengupta, Consultant for the Gem & Jewellery Industry, highlighted the positive impact of the duty reduction on the organised retail jewellery sector. "The massive reduction of customs duty on gold and silver to 6 per cent will provide a big boost to the jewellery industry. It will also reduce metal procurement from the grey market due to the reduced customs duty, benefiting big organised jewellery brands. This is a very welcome step from the government for the jewellery industry," Sengupta said.
Atul Saraf, Director of Aisshpra Gems & Jewels, emphasised the benefits for customers. "This budget is very good for the jewellery industry. We have been demanding a reduction in import duties on metals like gold, silver, and platinum for a long time. The government has listened to our demands in this budget. This reduction will lead to a decrease in the rates of gold, silver, and platinum jewellery, directly benefiting customers and boosting the market," Saraf remarked.
Overall, the jewellery industry views the Union Budget 2024's reduction in customs duties as a significant and positive development that will enhance demand, reduce illegal trade, and support the growth of the organised retail jewellery sector.
