For the Union Budget 2026-2027, India’s gems and jewellery industry is urging the government for a mix of GST cuts, customs reforms and policy changes to counter global trade headwinds and improve export competitiveness. In its pre-Budget memorandum submitted to finance minister Nirmala Sitharaman, the Gem and Jewellery Export Promotion Council (GJEPC) highlighted measures aimed at lowering costs for exporters and strengthening India’s role in the global diamond trade and value discovery ecosystem. “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,” GJEPC chairman Kirit Bhansali said. According to Bhansali, the proposals focus on enhancing cost efficiency, reinforcing Special Economic Zone (SEZ) operations and improving policy frameworks that support investment and skill development. He said that with supportive reforms and a stable trade environment, India could both withstand current global pressures and drive the next phase of growth in the international jewellery market. The Council flagged concerns over the existing 4% Safe Harbour tax, stating that it remains too high and discourages international trade. The agency also called for rationalisation of import duties on cut and polished diamonds as well as coloured gemstones to help Indian exporters remain competitive globally. In addition, the GJEPC has sought amendments to the Customs Act, 1962, to bring customs procedures in line with the needs of a fast-evolving, export-oriented gems and jewellery sector. Its recommendations include risk-based customs clearance, AI-enabled digital appraisals and self-certification for trusted exporters to improve efficiency, transparency and turnaround time. Separately, the All India Gem and Jewellery Domestic Council (GJC) has made its own representation to the government, focusing on GST rationalisation, hallmarking, direct tax reforms and sector-wide improvements. “GST on gold and silver jewellery should be rationalised to 1.25 per cent from 3 per cent, which will help restore proportionality, reduce financial stress on households, and enable a wider base of taxed transactions,” GJC chairman Rajesh Rokde said. The GJC has also proposed exempting capital gains tax on exchanges of hallmarked jewellery, provided the proceeds from the sale are immediately reinvested in new jewellery purchases, thereby ensuring continuity of asset holding. Another key demand relates to the Tourist GST Refund scheme. The Council has urged the government to operationalise the scheme at the earliest by notifying the required rules and setting up digital claim and verification systems at major international gateways. It suggested starting with a phased pilot at Delhi, Mumbai and Bengaluru airports, citing higher levels of jewellery sales and foreign tourist arrivals. “Foreign tourists, particularly from the Middle East, Europe and the United States, face a tax-inclusive price disadvantage while purchasing jewellery in India as compared to regional competitors like the UAE and Singapore, where such refunds are efficiently processed through automated airport systems,” Rokde said. The expert further highlighted that this results in a lost opportunity for India “wherein foreign buyers either defer purchases or procure jewellery abroad, converting India’s competitive craftsmanship into exported retail demand losses.”
