A woman looks at a gold bangle inside a jewellery showroom at a market in Mumbai.
Credit: Reuters File Photo
Mumbai: The first budget of Narendra Modi’s third term as Prime Minister would be a game-changer for the gems and jewellery sector and is a step closer towards making India a global diamond trading hub, according to Gem & Jewellery Export Promotion Council (GJEPC), the apex body of the sector.
The decision to reduce custom duties on gold and silver to 6 per cent and that of platinum to 6.4 per cent will enhance domestic value addition in gold and precious metal jewellery in the country.
GJEPC Vipul Shah said Finance Minister Nirmala Sitharaman acknowledged that India is a world leader in diamond cutting, polishing and manufacturing, which employs more than a million skilled workers.
GJEPC said that the abolition of equalisation levy and announcement of safe harbour tax on rough diamond trading will see the growth of India as the largest rough diamond trading centre as all foreign mining companies will now trade rough diamonds directly to the diamond cutting and manufacturing entities in India. Thus the small manufacturers will get access to raw materials in India directly from diamond miners without the need to travel abroad to take part in diamond auctions.
The abolition of the 2 per cent Equalization Levy and introduction of the Safe Harbour Rule on sale of rough diamonds at Special Notified Zones (SNZs) will firmly establish India as a global rough diamond trading hub.
"These combined measures will propel the sector’s growth, generate lakhs of employment opportunities by benefitting the small-scale jewellery manufacturers & exporters and diamond cutters and polishers, thus contribute significantly to India’s vision of becoming a Viksit Bharat by 2047,” said Shah.
The GJEPC also welcomed the Government’s proposal to provide for safe harbour rate for foreign mining companies selling rough diamonds in the country and abolition of equalization levy. This will put India on equal footing with global trading centres such as Belgium and Dubai. This will further promote the development of the gem and jewellery sector.
The reduction in duties of gold, silver and platinum will ensure that duty blockage of around Rs. 982.16 crore can be released resulting in more working capital in hand of the exporters. This will help in growth of manufacturing due to enhanced demand for jewellery at domestic level and realise the untapped export potential for gold jewellery with more working capital (at least US$2 billion of US$ 11 billion in the medium period of 2 years), he said.
Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.