India’s jewellery sector has high expectations from the Union Budget 2025, seeking measures to address taxation challenges, boost consumer demand, and unlock the industry’s untapped potential. Stakeholders, including Malabar Gold & Diamonds and the All India Gem & Jewellery Domestic Council (GJC), are advocating policies to reduce tax burdens, promote gold monetisation, and accelerate formalisation.
Following the customs duty cut introduced in the previous budget, industry players are urging a revision of the current GST rates and enhanced gold monetisation measures to mobilise idle gold and reduce reliance on imports.
The size of the Indian jewellery retail sector was close to $80 billion in FY24. Within this landscape, organised retail accounted for about 36-38 percent and comprised both pan-India and regional players. The remainder of the jewellery retail sector continued to be dominated by the unorganised/local players, comprising over 500,000 local goldsmiths and jewellers, according to a sector report from brokerage Motilal Oswal. Jewellery accounted for 66 percent of the total gold consumption in India and bars and coins for the remaining 34 percent.
The jewellery market is projected to grow at a 15-16 percent CAGR, reaching $ 145 billion by FY28, with the organised sector expected to expand at over 20 percent CAGR to account for 42-43 percent of the total market. This growth is driven by rising disposable incomes, increasing demand for regular wear jewellery, enhanced product offerings, hallmarking for trust-building, and improved shopping experiences at organised retail outlets.
“The industry faces numerous challenges, including complex taxation, stringent compliance requirements, and limited access to finance…. We therefore seek rationalisation of taxes and availability of finance to support business. With the continuously increasing gold rates, the current rate of GST is becoming increasingly burdensome for the industry and end customers. Hence, we humbly request a reduction in GST, which will encourage compliance,” said by the Chairman, GJC.
Similar concerns were raised by the Chairman of the Indian jewellery group Malabar Gold & Diamonds.
“In the first full budget of NDA 3.0, the jewellery industry expects policy continuity to boost consumer demand for jewellery, thus generating more employment and playing a pivotal role in the economic growth. To boost demand for precious jewellery, the budget needs to propose tax relief measures to boost disposable income and consumption. Some strategic measures to control inflation impact on consumption are also welcome,” he said.
The Indian government fixed the Goods and Services Tax (GST) rate for gold, silver, and processed diamonds at 3 percent during the implementation of the GST regime on July 1, 2017. This rate was decided to simplify taxation and replace the earlier system of multiple indirect taxes. GJC has proposed that the GST rate be fixed at 1 percent.
Meanwhile, the industry is also seeking measures to make the gold monetisation scheme more attractive for consumers. The scheme, announced in 2015, allows gold depositors to earn interest on their bank deposit accounts.
“The government may propose measures to revise the existing gold monetisation scheme to facilitate participation of recognised and reputed retail jewellers,” he added.
