Gem and jewellery industry applauds customs duty reduction
The Indian gems and jewellery industry has expressed its appreciation for the government's decision to reduce the basic customs duty on platinum findings and slash jewellery duties as part of the Union Budget 2025-26. The move has been welcomed by key industry leaders, including Vipul Shah, Chairman of the Gem and Jewellery Export Promotion Council (GJEPC).
Shah
commended the government's proposal to create new tariff items under Chapter 71
of the Customs Tariff, which will now distinguish between precious metals
containing 99.9% or more by weight of silver, 99.5% or more by weight of gold,
and 99% or more by weight of platinum. These metals will be categorized under
headings 7106, 7108, and 7110, respectively.
This initiative addresses a long-standing issue raised by the GJEPC: the classification of platinum alloys, particularly those that predominantly contain gold. This ambiguity had previously led to incorrect claims for customs duty exemptions, particularly with respect to imports of platinum under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). By implementing clearer tariff distinctions, the government is working to ensure a more streamlined and fair process for platinum imports, benefiting the jewellery sector.
The reduction in customs duty on platinum findings and the revision in jewellery duties are expected to bolster the competitiveness of the Indian gems and jewellery industry, helping it further strengthen its position in the global market. With these reforms, manufacturers and exporters can expect a more predictable and transparent process, which will likely lead to cost savings and an overall boost to the sector’s growth.
This decision also has a significant impact on the Indian jewellery manufacturing ecosystem. Platinum findings are crucial for the production of high-end jewellery, and by reducing customs duties, the cost of production will decrease, making it more affordable for manufacturers. This, in turn, could lead to an increase in the production of platinum-based jewellery, allowing Indian manufacturers to tap into global markets that demand high-quality platinum jewellery. With the rise of international demand for luxury and customized jewellery, this reform comes at a crucial time, giving Indian businesses a competitive edge.
Furthermore, the new tariff classification system introduced by the government is expected to improve the transparency and efficiency of the customs process. With clearer categorization of precious metals and alloys, the risk of disputes over customs duty claims will be minimized. For exporters, this means a smoother and quicker clearance process, which will aid in reducing lead times and ensuring timely deliveries. This boost to the supply chain, combined with the reduced costs of raw materials, is likely to encourage more investment in the sector, driving both domestic growth and export opportunities in the global jewellery market.
Source: https://www.msn.com