The Gem & Jewellery Export Promotion Council (GJEPC) has sought duty rationalisation, SEZ reforms, customs simplification, tax reforms for exporters, support for lab-grown diamonds, and measures to position India as a global diamond trading hub in its pre-budget recommendations submitted to the Union finance minister Nirmala Sitharaman.
India’s gem and jewellery exports, valued at USD 28.7 billion in FY 2024–25, continue to play a pivotal role in driving foreign exchange earnings and employment generation. However, the industry currently faces multiple challenges — including geopolitical uncertainties, the impact of U.S. tariff actions, and slowing consumer demand in key markets.
As the sector works to diversify exports and tap new markets, GJEPC has urged the government to consider targeted duty rationalisation and procedural reforms that will help Indian manufacturers stay cost-competitive.
Kirit Bhansali, Chairman, GJEPC, said, “The global gem and jewellery trade is undergoing a major transformation. With high U.S. tariffs, evolving consumer preferences, and shifting global supply chains, it is imperative that India maintains its competitive edge. Our pre-Budget proposals are focused on making Indian exports more cost-efficient, strengthening SEZ operations, and improving policy frameworks that encourage investment and skill development. A key objective is also to establish India as a global diamond trading hub, complementing its position as the world’s leading cutting and polishing centre. With supportive reforms and a stable trade ecosystem, India can not only weather current global challenges but also lead the next phase of growth in the international jewellery market.”
India, which cuts and polishes nearly 90% of the world’s rough diamonds, continues to lack a global trading hub comparable to Antwerp and Dubai. To address this, GJEPC has recommended the introduction of a liberalised and predictable taxation regime on foreign mining companies (FMCs) operating in Special Notified Zones (SNZs). The current 4% Safe Harbour tax is considered too high and deters international trading activity. Drawing inspiration from Belgium’s successful “Carat Tax” model, which has attracted global diamond trading to Antwerp, GJEPC proposes a similar approach to position India as a diamond trading and value discovery centre. The Council also seeks permission for reputed global brokers to operate in India, thereby improving transparency, liquidity, and international participation in the domestic market.GJEPC has urged the government to rationalise import duties on cut and polished diamonds and coloured gemstones to help Indian exporters remain globally competitive. India is facing challenges due to beneficiation policies of mining countries, demand slowdown, and new rival centres emerging in Africa and Southeast Asia. Under current rules, semi-processed diamonds imported from mining countries are classified as “cut and polished” and attract a 5% Basic Customs Duty, making Indian exports less competitive.
Similarly, many rough gemstone–producing countries have restricted exports or imposed high duties, forcing Indian jewellers to import finished gemstones for manufacturing. The existing 5% import duty on these stones adds to costs and weakens India’s position against competitors like Thailand and China. GJEPC has therefore recommended reducing the duty on cut and polished diamonds and gemstones to 2.5% and abolishing duties on rough gemstones to sustain manufacturing, employment, and export growth.
To stabilise earnings for exporters amid fluctuating metal prices, GJEPC has proposed replacing the existing fixed-rate duty drawback system with an ad-valorem (value-based) mechanism. The current fixed drawback reimburses only about 75–80% of the duty paid, resulting in consistent losses for exporters. With gold prices ranging between Rs 99,000 and Rs 1,25,000 per 10 grams, a fixed refund mechanism becomes unviable. An ad-valorem system would ensure proportionate refunds offering fair compensation and predictability to jewellery exporters. According to GJEPC, this measure is vital for maintaining India’s export momentum and financial stability across the value chain.
The Council has also called for the inclusion of platinum jewellery and gold articles under the Duty Drawback Scheme. Platinum jewellery exports from India have grown nearly 17 times in the past five years, largely from SEZs that benefit from duty exemptions. However, Domestic Tariff Area (DTA) exporters remain at a disadvantage without similar incentives. Extending the duty drawback benefit to DTA units would create a level playing field, encourage diversification, and unlock India’s potential to become a global hub for platinum and high-end gold jewellery manufacturing.
To position India as a premier luxury shopping destination, GJEPC has recommended the introduction of a comprehensive tax refund scheme for foreign tourists. Currently, international visitors purchasing jewellery in India are subject to Basic Customs Duty (BCD), Agriculture Infrastructure and Development Cess (AIDC), and Goods and Services Tax (GST), but only the GST component is refundable. The Council proposes a system that allows tourists to claim refunds on all applicable taxes — similar to Dubai and Singapore — making Indian jewellery more competitively priced and appealing to global shoppers. This initiative, GJEPC believes, would significantly boost tourism-driven retail and reinforce “Brand India” as a luxury shopping destination.
With global demand fluctuations affecting export performance, GJEPC has sought operational flexibility in Special Economic Zones (SEZs) to ensure business continuity and safeguard employment. The Council has proposed allowing SEZ units to undertake “reverse job work” for domestic orders during export slowdowns, preventing idle capacity. It also recommends permitting clearance of unsold inventory into the Domestic Tariff Area (DTA) upon payment of duty, thereby reducing wastage. Simplifying logistics through a “Bill to Ship to” mechanism would further ease compliance and improve efficiency. These measures, GJEPC asserts, will help SEZs remain viable, protect skilled jobs, and strengthen India’s manufacturing base.
GJEPC has urged the need to amend the Customs Act, 1962, to align customs processes with the requirements of a fast-evolving, export-driven gems and jewellery sector. The Council has recommended reforms such as risk-based customs clearance, AI-enabled digital appraisals, and self-certification for trusted exporters to improve speed, transparency, and cost efficiency.
In addition, GJEPC has called for uniform Standard Operating Procedures (SOPs) and simplified procedures for the export of finished goods and import of raw materials across all customs ports, to reduce procedural bottlenecks and enhance ease of doing business for the industry.
Recognising India’s global leadership in the lab-grown diamond (LGD) segment, GJEPC has recommended the continuation of the existing duty exemption on imported LGD seeds beyond March 2026. As the industry still depends on high-quality imported seeds for consistency and yield, extending the exemption is crucial to maintaining cost competitiveness and export growth. The Council believes that sustaining this policy will promote higher domestic production, enhance employment opportunities, and ensure that India retains its leadership position in the rapidly expanding global LGD market.
