The gems and jewellery industry has sought targeted tax and policy support in the Union Budget 2026-27, citing mounting pressure from high global tariffs, changing consumer trends and shifting supply chains.

The Gem and Jewellery Export Promotion Council (GJEPC) submitted its pre-Budget recommendations to Finance Minister Nirmala Sitharaman, calling for duty rationalisation, procedural reforms and measures to strengthen India’s position in global diamond trading.

GJEPC chairman Kirit Bhansali said the global gem and jewellery trade is undergoing a major transformation and stressed that India must protect its competitive edge. He said the Council’s proposals focus on making exports more cost-efficient, strengthening special economic zone operations, and improving policy frameworks to encourage investment and skill development.

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The Council flagged concerns over the existing 4 per cent Safe Harbour tax, describing it as too high and a deterrent to international trade. It urged the government to rationalise import duties on cut and polished diamonds and coloured gemstones to help exporters remain globally competitive. GJEPC also recommended amendments to the Customs Act, 1962, to better align customs processes with the needs of an export-driven sector.

Among the key suggestions were the introduction of risk-based customs clearance, AI-enabled digital appraisals and self-certification for trusted exporters to improve speed, transparency and cost efficiency.

Separately, the All India Gem and Jewellery Domestic Council (GJC) called for GST reforms, hallmarking-related changes and direct tax relief. GJC chairman Rajesh Rokde proposed reducing GST on gold and silver jewellery to 1.25 per cent from the current 3 per cent, saying it would ease financial stress on households and widen the tax base.

The GJC also sought exemption from capital gains tax on the exchange of hallmarked jewellery when sale proceeds are immediately reinvested in new jewellery, maintaining continuity of asset holding. In addition, it urged the early rollout of the Tourist GST Refund scheme, with a pilot at major airports such as Delhi, Mumbai and Bengaluru.

Rokde said foreign tourists currently face a price disadvantage when buying jewellery in India due to the lack of GST refunds, unlike in countries such as the UAE and Singapore. He added that this results in lost retail opportunities for India, despite its strong craftsmanship and manufacturing capabilities.