The reduction in import duty on cut and polished diamonds and gemstones in the Union Budget 2022 has come as a small relief to the jewellery industry. However, the industry had more expectations of the Budget.
The customs duty on polished diamonds and gemstones has been reduced from the existing 7.5% to 5%, and sawn or rough diamonds would not attract any duty at all. While this is a welcome move, it will only benefit a relatively small section of traders, jewellers noted.
“It will be more of a benefit to exporters -- polished diamonds contribute to less trade in the domestic market,” said N. Ananthapadmanabhan, former chairman, All India Gem and Jewellery Domestic Council.
The announcement for a simplified regulatory framework to encourage export of jewellery through e-commerce by June was a welcome move. This would open new avenues to jewellers. “We also need to wait and see the impact of digital currency set to be introduced for gold investments,” he added.
The jewellery industry was expecting a cut in import duty on gold by at least 2% or 3% to boost sales. Though there was a cut earlier, there was not much benefit, as agriculture infrastructure and development cess was added to it, jewellers said.
The Jewellers and Diamond Traders’ Association-Madras had recently represented to the Union Finance Minister seeking to announce the jewellery-making industry as a cottage industry and also to establish a jewel park in Chennai, where manufacturers can set up factories and create more employment opportunities.
Jayanthilal Challani, president of the association, said “We also expected announcements to popularise the gold monetisation scheme that allows people to deposit idle gold in banks. Though an announcement was made, the scheme did not take off as expected. Gold imports would have become fewer, and prices too, would have dropped. Jewellers with large customer bases could also have been used to popularise for the scheme,” he said.
