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Budget 2024: GJ industry presents its wish list

Updated: Jan 31





 

We spoke to a cross section of  GJ  industry leaders on what they are expecting from the forthcoming interim budget.

 

The gems and jewellery industry has articulated its wish list for Finance Minister Nirmala Sitharaman, encompassing key considerations such as a reduction in import duties on gold and silver and the introduction of a Diamond Imprest License, among many others.






GJEPC’s pre-Budget proposals will facilitate easy access to raw materials for the industry especially for MSMEs.

 By introducing Safe harbour rule for sale of rough diamonds in Special Notified Zones (SNZs), India can become a trading hub like Dubai and Belgium.

Introduction of Diamond Imprest License or reduction of import duty on cut & polished diamond from 5% to 2.5% will help to cope up the impact of beneficiation policies undertaken in a number of natural diamond mining countries.

 We are hopeful that with the additional support of the Government in terms of reduction in import duty of precious metals and MOOWAR scheme for gem and jewellery industry, the exports of gold jewellery will increase substantially in these challenging times.


Vipul Shah

Chairman -GJEPC






We urge the Finance Ministry to withdraw the increase in BCD on gold in the upcoming Union Budget and a rationalized tax structure may be developed to tackle CAD issue.


With the rising gold rate, there is an urgent need to increase the PAN card transaction limit to Rs 5 lakh from the present Rs 2 lakh. With the cash purchase limit of Rs 10,000 per day under the Income Tax Act, consumers cannot sell gold jewellery to meet their needs. Hence, the daily purchase limit needs to be increased to Rs 100,000 per day.

 Saiyam Mehra

Chairman –GJC



To be vocal for local, and to facilitate ‘Make in India’ and promote ‘Ease of doing business’, the FinMin must look into amending the present SEZ Act so that SEZs could be better integrated in the domestic market. The budget should look at permitting ‘reverse job-work’, which allows SEZs to sell in the domestic market where all duties relinquished on raw materials could be paid back. The move will prevent companies present in these zones from being disadvantaged due to a lack of access to the entire market. It will allow them to sell domestically, also offering a waiver on all duties on raw materials.

 

The move will also lead to further strengthening the SEZs of India, which have emerged as major export hubs in the country. However, in recent times it has started losing its value due to the imposition of minimum alternate tax and the introduction of a sunset clause to end fiscal incentives. This has resulted in many SEZs lying vacant, hurting the economic growth. The policy will put SEZs on an equal footing with non-SEZ units that enjoy the benefits of zero or reduced import duties through free trade agreements.

 

Colin Shah

 MD - Kama Jewelry





The organized jewellery retail segment is growing at a steady pace, thanks to regulatory reforms such as the mandatory hallmarking of gold jewelry and GST.


However, to unlock the potential of the organized jewelry retail segment, the budget needs to propose a reduction in the import duty on gold. A higher gold import duty is detrimental to the growth of the organized jewellery retail sector, as it indirectly promotes gold smuggling and unauthorized grey market transactions.


The budget also needs to propose measures to control unaccounted business practices by implementing effective tax compliance and transparency mechanisms. The interim budget should also propose measures to create a broader pathway for growth for the organized jewelry retail segment.


M. P. Ahammed,

Chairman- Malabar Gold & Diamonds

 



Given the proximity of the national elections this year, we expect that the 2024 budget will be populist and people-friendly. The emphasis will continue on improving infrastructure, Make in India, electric vehicles, and power generation. We anticipate and hope that the government would reduce duties on gold imports, rationalize pricing, and therefore contribute to the creation of a level playing field between the regular and grey markets.

 

Prithviraj Kothari

 MD- RiddiSiddhi Bullions Limited

 

 



In this interim budget year, our expectations are tempered by the election cycle, yet we anticipate continuity in the government's focus on bolstering domestic consumption, infrastructure, and emerging sectors like EVs and tourism. A stable post-election government will sustain the economic surge, fostering increased disposable income and discretionary spending.

 

The gems and jewellery industry awaits measures to fortify the IIBX exchange, enhanced liquidity for it, so that Indian becomes a price maker and not a price taker. Reduction in import duties on gold, will ensure that unscrupulous grey market players lose their edge and start getting more organized. Embracing gold monetization and nurturing e-commerce will further propel the industry into a dynamic era of growth and innovation.

 

Dr. Saurabh Gadgil

CMD - PNG Jewellers

 




This being interim budget, not much is expected in this budget. However we wish that duty reduction and efforts to boost International Bullion exchange are taken on priority. We would also like to see that all hurdles are removed so that Electronic Gold receipts(EGR) are successfully traded on domestic bullion spot exchange.

Surendra Mehta

National Secretary -IBJA

 

 



As 2024 is going to be an interim budget, the government is likely to continue with manufacturing incentives, upgrade infrastructure-related capex in the country, and promote Make in India, electric vehicles, and power generation.

We anticipate and hope that the government will lower tariffs on gold imports, rationalize pricing, and thereby contribute to the formation of a level playing field between the regular and grey markets.

Sachin Kothari

 Director- Augmont Gold For All

 



In this upcoming budget, we anticipate the Honourable Finance Minister's consideration for a reduction in the import duty on rough diamonds from 5% to 2.5%. Such a measure would not only make diamonds more affordable but also bolster their competitiveness in the global market. 

Furthermore, we expect a reduction in the duty on gold bullion, aiming to eradicate the prevalent grey market. The current substantial price differential between gold in India and abroad has contributed to the flourishing of the grey market. Lowering the duty on gold would effectively eliminate the grey market, leading to increased revenue collection for the government. 

Additionally, this adjustment would enhance the competitiveness of our gold prices on a global scale, particularly in comparison to other nations, notably in the Middle East.


Mitesh Khimji

Director of Khimji Jeweller

 

 



Availability of gold in the form of gold loan at very competitive pricing is the need of the hour.

The Budget needs to ensure a continuous focus on skill development.Artisans need to update themselves with the international standards of manufacturing. And if any machinery is procured, we should be able to import such machinery at lower duties and get government support and subsidies.

Budget should  look into providing special finance to help Indian brands and manufacturers to establish businesses outside to take the brand ‘Made in India’ onto the global stage.

 If the Budget can support manufacturers in terms of cost of capital or capex, then that will play a big role and provide a boost for various players, to take steps to improve their reach across the world.

The government via budgetary steps must support the industry with new technologies - be it AI, Lab grown diamonds or latest machinery. 

To boost liquidity and exports in the Jewellery Industry, government should  reduce the customs duty for releasing of margin money with banks.

 

 Suvankar Sen

 MD & CEO- Senco Gold and Diamonds.



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