The gem and jewellery manufacturing sector may not have received direct benefits from the recent GST reforms, but businesses are optimistic about a surge in domestic demand, especially as exports remain subdued due to 50% tariff imposed by the US.
“There is steady domestic demand, and it is likely to improve further as GST rates on several products have been lowered, leaving people with more savings. The GST rate on jewellery remains unchanged,” said Amit Korat, president of the Surat Jewellery Manufacturers’ Association (SJMA).
The Gem and Jewellery Export Promotion Council (GJEPC) welcomed the GST rationalisation as a crucial step to boost consumption.
The GST Council’s decision to exempt imports of natural cut and polished diamonds up to 25 cents under the Diamond Imprest Authorisation Scheme (DIAS) from IGST, previously 18%, is considered a relief for working capital pressures and supports manufacturers and exporters engaged in small-diamond processing.
In addition, the GST reduction from 12% to 5% will lower costs for retailers and exporters, while making packaging and gifting more affordable for consumers — benefiting both businesses and buyers alike.
Kirit Bhansali, chairman of GJEPC, said, “These measures will stimulate domestic demand and provide a cushion to our export supply chains, which are under pressure due to global challenges. The diamond and jewellery sector remains committed to ensuring that the benefits, including reduced costs for jewellery boxes, are transparently passed on to consumers.”
These reforms, combined with GST reductions in allied sectors such as handicrafts, leather goods, and packaging, will further strengthen India’s diamonds and jewellery ecosystem. By lowering operational costs, enhancing affordability, and boosting global competitiveness, they reinforce India’s position as a leading hub for diamond processing, jewellery design, and exports.
Further, the growth in the economy is expected to support the gem and jewellery industry against the tariff blow. According to GJEPC, India has now emerged as one of the leading jewellery-consuming markets globally, with diamond jewellery alone accounting for $8.5 billion, nearly 10% of world demand.
“India’s 7.8% GDP growth in the first quarter of FY 2026, despite global headwinds like the recent US tariff, reflects the resilience of our economy. Rising domestic demand for gems and jewellery will help to ward off some impact of the 50% import tariff on diamonds that has been imposed by the USA,” said Bhansali.
