Budget 2026 wishlist: Gems and jewellery sector calls for tax relief, export-friendly reforms
In its pre-Budget submission to Finance Minister Nirmala Sitharaman, the Gem and Jewellery Export Promotion Council (GJEPC) outlined a series of measures aimed at making Indian exports more cost-efficient and strengthening the country’s position as a global hub for diamond trading and price discovery.
- Jan 14, 2026,
- Updated Jan 14, 2026 9:38 PM IST
As the Union Budget 2026–27 approaches, India’s gems and jewellery industry has stepped up its push for targeted policy support to safeguard competitiveness in an increasingly complex global trade environment. Industry bodies are calling for a combination of duty rationalisation, procedural reforms and tax relief to help exporters and domestic players navigate rising costs, shifting supply chains and intensifying international competition.
In its pre-Budget submission to Finance Minister Nirmala Sitharaman, the Gem and Jewellery Export Promotion Council (GJEPC) outlined a series of measures aimed at making Indian exports more cost-efficient and strengthening the country’s position as a global hub for diamond trading and price discovery. The council noted that the sector is facing headwinds from higher tariffs in key markets such as the United States, changing consumer preferences, and structural shifts in global sourcing.
According to GJEPC, the focus of its recommendations is on improving the overall ease of doing business for exporters. This includes proposals to enhance the functioning of special economic zones, streamline regulatory frameworks and encourage greater investment in skills and infrastructure. The council believes that with a stable and supportive policy environment, India can not only withstand current global pressures but also play a leading role in the next phase of growth for the international jewellery trade.
A major concern highlighted by the industry is the current 4 per cent Safe Harbour tax, which it argues discourages international transactions and undermines India’s competitiveness. GJEPC has urged the government to review and rationalise import duties on cut and polished diamonds as well as coloured gemstones. It has also called for amendments to the Customs Act, 1962, to better align customs procedures with the needs of a fast-moving, export-oriented sector.
To improve efficiency at ports and reduce compliance costs, the council has recommended the adoption of risk-based customs clearances, artificial intelligence-driven digital appraisals and self-certification for trusted exporters. These measures, it says, would enhance speed, transparency and predictability across the supply chain.
On the domestic front, the All India Gem and Jewellery Domestic Council (GJC) has submitted a parallel set of proposals focusing on tax reforms, hallmarking and broader industry improvements. A key demand is the reduction of GST on gold and silver jewellery from the current 3 per cent to 1.25 per cent. The council argues that such a move would ease financial pressure on households, restore pricing balance and expand the formal tax base by encouraging greater compliance.
The GJC has also sought capital gains tax relief for consumers who exchange hallmarked jewellery and reinvest the proceeds in new purchases, thereby maintaining continuity of asset ownership. In addition, it has pressed for the early rollout of the Tourist GST Refund scheme, supported by digital claim and verification systems at major international airports.
The council has suggested launching a pilot of the refund mechanism at Delhi, Mumbai and Bengaluru airports, where both jewellery sales and foreign tourist traffic are highest. Industry leaders point out that international buyers currently face a price disadvantage in India compared with markets such as the UAE and Singapore, where tax refunds are processed seamlessly. As a result, potential sales are often lost, turning India’s strength in craftsmanship into missed opportunities in retail exports.
As the Union Budget 2026–27 approaches, India’s gems and jewellery industry has stepped up its push for targeted policy support to safeguard competitiveness in an increasingly complex global trade environment. Industry bodies are calling for a combination of duty rationalisation, procedural reforms and tax relief to help exporters and domestic players navigate rising costs, shifting supply chains and intensifying international competition.
In its pre-Budget submission to Finance Minister Nirmala Sitharaman, the Gem and Jewellery Export Promotion Council (GJEPC) outlined a series of measures aimed at making Indian exports more cost-efficient and strengthening the country’s position as a global hub for diamond trading and price discovery. The council noted that the sector is facing headwinds from higher tariffs in key markets such as the United States, changing consumer preferences, and structural shifts in global sourcing.
According to GJEPC, the focus of its recommendations is on improving the overall ease of doing business for exporters. This includes proposals to enhance the functioning of special economic zones, streamline regulatory frameworks and encourage greater investment in skills and infrastructure. The council believes that with a stable and supportive policy environment, India can not only withstand current global pressures but also play a leading role in the next phase of growth for the international jewellery trade.
A major concern highlighted by the industry is the current 4 per cent Safe Harbour tax, which it argues discourages international transactions and undermines India’s competitiveness. GJEPC has urged the government to review and rationalise import duties on cut and polished diamonds as well as coloured gemstones. It has also called for amendments to the Customs Act, 1962, to better align customs procedures with the needs of a fast-moving, export-oriented sector.
To improve efficiency at ports and reduce compliance costs, the council has recommended the adoption of risk-based customs clearances, artificial intelligence-driven digital appraisals and self-certification for trusted exporters. These measures, it says, would enhance speed, transparency and predictability across the supply chain.
On the domestic front, the All India Gem and Jewellery Domestic Council (GJC) has submitted a parallel set of proposals focusing on tax reforms, hallmarking and broader industry improvements. A key demand is the reduction of GST on gold and silver jewellery from the current 3 per cent to 1.25 per cent. The council argues that such a move would ease financial pressure on households, restore pricing balance and expand the formal tax base by encouraging greater compliance.
The GJC has also sought capital gains tax relief for consumers who exchange hallmarked jewellery and reinvest the proceeds in new purchases, thereby maintaining continuity of asset ownership. In addition, it has pressed for the early rollout of the Tourist GST Refund scheme, supported by digital claim and verification systems at major international airports.
The council has suggested launching a pilot of the refund mechanism at Delhi, Mumbai and Bengaluru airports, where both jewellery sales and foreign tourist traffic are highest. Industry leaders point out that international buyers currently face a price disadvantage in India compared with markets such as the UAE and Singapore, where tax refunds are processed seamlessly. As a result, potential sales are often lost, turning India’s strength in craftsmanship into missed opportunities in retail exports.