Union Budget 2026-27: Diamond Jewellery Gets Price Boost While Gold & Silver Remain Costly
The Union Budget 2026-27 has delivered a mixed bag for jewellery consumers across India, with significant duty relief for lab-grown diamonds but no respite for those eyeing gold and silver ornaments. While diamond jewellery is set to become more accessible, precious metal jewellery prices are likely to remain stubbornly high due to unchanged import duties.
Extended Customs Duty Exemptions Benefit Lab-Grown Diamonds
In a move that promises to make diamond jewellery more affordable, the government has extended customs duty exemptions on key diamond inputs until March 2028. The budget continues the duty-free import of simply sawn diamonds (SSD) – rough diamonds that have been sawn but not polished – and lab-grown diamond (LGD) seeds used in reactors.
This extension is particularly significant as SSD previously attracted an effective duty of around 7%, while LGD seeds faced a 0.5% duty. The continued exemption is expected to benefit both manufacturers and consumers significantly.
"Consumers will get both lab-grown and natural diamonds at better prices," said CA Mihir Modi. "The extension will also sustain manufacturing and employment in Gujarat, which is a major hub for diamond processing in India."
Gold and Silver Jewellery: No Duty Relief Means Continued High Prices
In stark contrast to the diamond sector, the budget offers little comfort to those planning to purchase gold or silver jewellery. Both precious metals continue to attract an effective import duty of 6%, comprising 5% Basic Customs Duty (BCD) and 1% Agriculture Infrastructure and Development Cess.
The absence of any duty reduction comes at a time when international gold and silver prices remain elevated, putting additional pressure on domestic jewellery costs.
"The absence of duty relief means consumers shouldn't expect price moderation," explained Haresh Acharya, director of the India Bullion and Jewellers' Association. "Since domestic prices track international markets and the outlook for both gold and silver remains upward, jewellery prices may actually increase in the coming months."
Limited Impact from Gold Processing Exemption
The budget did include one measure related to precious metals – an exemption on gold and silver produced from copper anode slime that was exported for toll smelting and subsequently re-imported. However, industry experts suggest this provision will have minimal effect on domestic jewellery prices.
"This will aid exporters and improve overseas competitiveness, but will have little impact on domestic jewellery prices," Acharya added, emphasizing that the measure is primarily aimed at boosting India's export capabilities rather than making jewellery more affordable for domestic consumers.
Consumer Implications: What Gets Cheaper, What Gets Costlier
The budget's differential treatment of diamonds versus precious metals creates distinct outcomes for jewellery shoppers:
- Lab-grown diamond jewellery becomes the most attractively priced segment, benefiting from extended duty exemptions
- Natural diamond jewellery also becomes more affordable due to reduced input costs
- Gold jewellery prices remain high with no duty relief amid elevated international prices
- Silver jewellery costs similarly stay elevated due to unchanged import duties
The budget's approach reflects the government's strategy to support domestic diamond manufacturing while maintaining revenue streams from precious metal imports. For consumers, this means careful consideration of jewellery purchases based on both budget constraints and personal preferences for different materials.
