Why gold monetisation, duty rationalisation matter in Union Budget 2026

Wed Jan 28 2026

The gems and jewellery sector is a key contributor to India’s economy, supporting around 5 million livelihoods and boosting exports. Following last year’s reduction in gold import duty, the industry expects policy continuity in the upcoming Budget, with possibilities for further calibrated cuts.

"Measures such as duty rationalisation on precious metals, export facilitation, improved access to raw materials through special notified zones and rationalisation of taxes on making charges can boost consumer demand, formalisation, and global competitiveness," Malabar Group chairman MP Ahammad said.

GJEPC chairman Kirit Bhansali said that the global gem and jewellery trade is undergoing a major transformation. With high US 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,” Bhansali said.

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, he said.

Gold also holds a special place in Indian culture and savings practices, with households traditionally keeping large amounts in unused jewellery and bars that contribute little to productive use. Promoting the idea of bringing this gold into the formal financial system through gold monetisation can unlock resources for investment, reduce dependence on expensive imports, and ease pressure on the trade deficit.

"Steps to make the Gold Monetisation Scheme (GMS) more attractive would mobilise household gold that is currently idle, reduce import dependence, and support macroeconomic stability. A growth-oriented Budget that enhances disposable income, eases credit for the trade and continues infrastructure-led development will strengthen organised retail and generate employment," Ahammad said.

The GMS (2015) was a Government of India initiative that allowed individuals and institutions to deposit idle gold (such as jewellery, bars, and coins) with banks to earn interest. Upon maturity, they can redeem it for cash or gold. It aims to mobilise privately held gold for productive purposes, reducing reliance on imports and decreasing storage costs.

Together, these measures can enhance macroeconomic stability, expand financial markets, and provide savers with better returns, making them key to both fiscal strategy and long-term growth in the Budget 2026.

Source: https://www.moneycontrol.com/