Budget 2026: Jewellery Industry Seeks GST Cut, Import Duty Relief and Simpler Tax Rules

As the Union Budget of India for 2026 approaches, India’s gems and jewellery industry has stepped up its demands for tax relief and regulatory simplification, arguing that supportive policy measures are essential to revive consumer demand, sustain employment and strengthen transparency across the sector.

Industry leaders say the upcoming Budget arrives at a crucial moment. With global trade facing uncertainty and consumers remaining price-sensitive, stakeholders believe targeted fiscal measures could help restore confidence and encourage spending in one of India’s largest employment-generating industries.

A major focus of the industry’s expectations is boosting demand while narrowing the divide between organised and unorganised segments. Business leaders argue that simpler and more transparent policies would not only improve compliance but also help formal players compete on a level playing field.

Executives from the sector have reiterated the need for consumer-friendly reforms, particularly around taxation. A key demand is a reduction in the Goods and Services Tax (GST) on gold jewellery. Currently levied at 3%, industry voices suggest that lowering it to around 1.5% could significantly ease the financial burden on buyers and stimulate consumption, especially in a climate where discretionary spending is under pressure.

Alongside GST relief, import duty rationalisation has emerged as another central demand. India imports the bulk of its gold requirements, making domestic prices highly sensitive to duty structures. Industry analysts believe that a reduction in gold import duty — currently at around 6% — to 4% or lower would improve affordability, discourage smuggling and increase transparency in bullion trade.

Experts also point out that complex customs and tax procedures add to compliance costs, particularly for small and mid-sized jewellers. Simplifying the framework by reducing tariff slabs and clarifying documentation requirements is expected to unlock liquidity across the value chain and make it easier for businesses to operate within the formal economy.

There is also renewed emphasis on strengthening financial products linked to gold. Stakeholders are calling for better incentives and easier digital access to revive Sovereign Gold Bonds, while seeking favourable tax treatment for Gold Exchange Traded Funds (ETFs). These measures, they argue, could accelerate the financialisation of gold and reduce excessive reliance on physical purchases.

Beyond domestic consumption, the jewellery industry has stressed its role as a major export driver. Leaders highlight that the sector supports millions of livelihoods across manufacturing, retail and allied services, making policy stability critical for long-term growth.

Suggestions for export-focused reforms include duty rationalisation on precious metals, smoother export facilitation processes, improved access to raw materials through Special Notified Zones, and rationalisation of taxes on making charges. Such steps are expected to enhance India’s global competitiveness while encouraging further formalisation of the sector.

Industry leaders have also flagged the importance of strengthening gold monetisation schemes. By mobilising idle gold held by households, these schemes could reduce import dependence and support macroeconomic stability over time.

Despite global headwinds, the sector remains cautiously optimistic. Stakeholders believe that a combination of tax relief, regulatory clarity and consumer-focused measures in Budget 2026 could help revive demand, protect employment and reinforce the jewellery industry’s contribution to India’s economic growth.