Editor’s Note
As India’s gems and jewelry sector grapples with record-high precious metal prices and shifting global dynamics, industry stakeholders are looking to the upcoming budget for measures to ensure stability and accessibility. This article outlines the key challenges and expectations for the 2026-27 fiscal year.
Summary
India’s gems and jewelry industry is expecting some concrete steps from the Budget 2026-27 to strengthen the sector amidst rising prices, global uncertainty, and changing consumer preferences. Gold and silver prices are at record highs, making jewelry increasingly inaccessible to the average consumer.
Sharp Surge in Gold and Silver Prices
Gold prices have risen by about 17% so far this year, following a 64% surge last year. Silver prices saw a massive 147% jump last year. This is due to demand for safe-haven investments, central bank purchases, easing US monetary policy, and record investments in exchange-traded funds.
Consumer Demand Steady but Cautious
Despite significant volatility in gold and silver prices, consumer demand remains steady, although they are now making more thoughtful purchases. This indicates that in India, jewelry is not just an emotional purchase but also a means of saving money.
Advice from Senco Gold’s CEO
“Affordable access to jewelry will be crucial in the coming year,” says Suvankar Sen, MD & CEO of Senco Gold. He suggested regulating small-ticket EMI options and reviewing the existing 3% GST rate on jewelry. He also emphasized the need to reconsider the 6% gold import duty, provide training for artisans, adopt technology, and offer flexibility to SEZ units to meet domestic demand.
Exporters’ Concerns and Demands
According to Mangesh Chauhan, MD of Sky Gold and Diamonds, the industry is demanding sensible reforms to reduce costs and ease of doing business amidst global challenges. Their key demands include a rational reduction in import duties, simplifying customs procedures, reducing GST to 1-1.25%, and early implementation of the Tourist GST Refund Scheme.
Perspective from Malabar Group’s Chairman
M.P. Ahmed, Chairman of Malabar Group, hopes that policy continuity will be maintained this year following last year’s cut in gold import duty. He emphasizes making the gold monetization scheme more attractive to bring household gold into the economy and reduce import dependency.
Expectations from the Diamond Trade
Jignesh Mehta, MD of Divine Solitaires, says the 5% import duty on natural diamonds should be reduced to 2.5% to boost exports, employment, and local production. He also noted that the BIS notification clarifying the difference between natural and lab-grown diamonds was a positive step.
Promoting Lab-Grown Diamonds
Anand Lakhani, CEO of Lukuson, believes the budget should recognize lab-grown diamonds as a strategic sector. Reducing duties on raw materials and machinery, providing incentives for upgraded manufacturing, and offering easy credit to MSMEs are essential for its growth.
The Path Forward
Neel Sonawala, Chairman of Zen Diamonds, hopes the budget will provide incentives for organized retail business, considering the growing demand for contemporary and lightweight diamond jewelry. A budget that enhances digital support, manufacturing, and consumer confidence will pave the way for the next phase of the jewelry sector’s growth.
Overall, the industry is hoping for a balanced budget that makes jewelry affordable, strengthens manufacturing and exports, and helps establish India as a powerhouse in the global jewelry market.
