India's Gold & Jewellery Sector Eyes Budget 2025-26 For Sustained Growth, Reforms
As the Union Budget 2025-26 approaches, India’s gold and jewellery sector anticipates significant policy announcements to bolster its growth and contribution to the national economy. The sector, which plays a crucial role in India’s GDP, exports, and employment, seeks reforms to address challenges like taxation, compliance, and idle gold utilisation while capitalising on recent positive developments.
No Increase In Import Duties
Sachin Jain, Regional CEO, India, World Gold Council, highlights the sector's recent gains, attributing them to last year’s import duty cuts. "The gold industry contributes 1.3 per cent to India's GDP and employs approximately 2-3 million people. The government's decision to reduce import duties last July has stabilised official channels, reduced unofficial imports, and encouraged domestic purchasing. However, any increase in import duties in the upcoming budget could reverse these gains, leading to higher smuggling and domestic gold prices. By fostering a synergetic environment, we can ensure the gold industry thrives and contributes significantly to India’s economic prosperity," Jain explained.
Rahul Joseph, Founder & CEO, White Gold, highlights the benefits of the previous duty reductions. "The proactive approach revitalised the sector, driving innovation and competitive pricing while increasing employment opportunities across mining, manufacturing, and retail. To sustain this trajectory, reducing taxes on gold resale is vital. It would bring idle gold into formal markets, foster liquidity, reduce import dependence, and improve India’s trade balance. This will ensure the sector remains a robust contributor to India’s economic stability," he added.
Simplified Tax Structures & Support to Fintech
Amol Bansal, Founder of MyGold, underscores the untapped potential of India’s idle gold reserves. “India holds around 25,000 tonnes of idle gold, representing an immense opportunity. Initiatives that promote gold mobilisation, digital gold adoption, and leasing mechanisms can transform the economy. Simplified tax structures and support for fintech platforms like MyGold can unlock gold's true value, benefiting households and businesses. This reimagining of gold as a financial enabler aligns with India’s vision of a $5 trillion economy," Bansal said.
Need For Continuity In Policy
MP Ahammed, Chairman of Malabar Group, emphasised the need for continuity in policy and strategic measures. “The reduction in gold import duty has strengthened demand, creating jobs and boosting the economy. The forthcoming budget must ensure continuity to sustain this momentum. Tax relief measures, a more attractive gold monetisation scheme, and steps to curb unaccounted retail business are essential. Additionally, infrastructure spending must continue to support organised retail growth," Ahammed noted.
Comprehensive Reforms To Address Compliance Challenges
The All India Gem & Jewellery Domestic Council (GJC) calls for comprehensive reforms to address the sector's taxation and compliance challenges. Rajesh Rokde, Chairman of GJC, urged, “Reducing GST on gems and jewellery from 3 per cent to 1 per cent would ease cost burdens and encourage compliance, increasing formal economy size. Concessional GST rates for lab-grown diamonds, establishing a dedicated ministry for the jewellery sector, and revamping the Gold Monetisation Scheme (GMS) are crucial steps. We also request a structured EMI scheme for jewellery purchases to promote Digital India initiatives."
Avinash Gupta, Vice Chairman of GJC, emphasised the transformative potential of GMS. “A revamped GMS can mobilise idle household gold, reduce imports, and promote self-reliance. GJC stands ready to assist in its nationwide implementation," Gupta stated.
Driving Export Growth and Global Leadership
Vaibhav Saraf, Director of Aisshpra Gems & Jewels, expressed optimism about the sector's growth. “The reduction in import duty has strengthened demand for precious metals and jewellery. Simplified taxation and supportive policies will encourage firms to grow and contribute to the national economy. The sector holds immense potential for export growth, and raising awareness about initiatives like GIFT City can boost competitiveness," Saraf added.
Facilitating Gold Imports
Ankur Anand, Director, Harsahaimal Shiamlal
Jewellers (HSJ) said, “We are confident that the 2025-26 budget will be
positive and progressive for the jewellery sector. The jewellery industry is
not only an integral part of India's tradition and culture but also a source of
livelihood for millions of artisans, traders, and entrepreneurs. If the
government takes steps to facilitate gold imports, encourage schemes for
artisans, and strengthen the industry formally, it will further expand India's
jewellery sector in both domestic and global markets. This budget has the
potential to pave the way for new opportunities and growth in our industry.”
With the Union Budget 2025-26 around the corner, India’s gold and jewellery industry hopes for reforms that support its growth and global competitiveness. Measures like tax rationalisation, gold monetisation reforms, and a clear regulatory framework can unlock the sector’s full potential, ensuring its continued contribution to India’s economy and cultural heritage. Industry stakeholders remain optimistic that the government will prioritise these recommendations to drive innovation, transparency, and sustainable growth.
Source: https://www.businessworld.in/