Gems and Jewellery Industry Presents Budget Wishlist for 2026-27
As the Union Budget 2026–27 draws near, India's gems and jewellery industry is advocating for a comprehensive package of demand-stimulating measures, tax rationalisation, and structural reforms. The sector aims to address challenges posed by price volatility, global trade uncertainties, and shifting consumer preferences. With gold and silver prices reaching unprecedented levels, making jewellery increasingly expensive for consumers, industry stakeholders are calling for targeted policy interventions.
Record-High Precious Metal Prices Impact Affordability
Gold prices have surged approximately 17% this year, following a remarkable 64% increase in 2025. This rally is driven by sustained safe-haven demand, robust central bank purchases, easing US monetary policy, and record inflows into exchange-traded funds. Similarly, silver prices experienced a staggering 147% surge last year. Despite this sharp volatility, consumer demand has remained resilient, though more measured, highlighting jewellery's dual role as an emotional purchase and a store of value.
Suvankar Sen, MD & CEO of Senco Gold, emphasises that affordability will be crucial in the coming year, especially with elevated gold prices. He proposes regulated small-ticket EMI options for gold jewellery and a review of the current 3% GST rate to alleviate consumer burden and encourage participation in the formal market. Sen also highlights India's substantial household gold holdings, estimated at nearly 24,000 tonnes, suggesting that innovative mechanisms to mobilise this physical gold could unlock significant long-term economic value.
Export Competitiveness and Manufacturing Reforms
From an export and manufacturing perspective, Mangesh Chauhan, Managing Director of Sky Gold & Diamonds, calls for pragmatic reforms to reduce costs and improve ease of doing business amid a challenging global trade environment. Key priorities include rationalising import duties on gold, silver, platinum, coloured gemstones, and other essential inputs to enhance export competitiveness. Chauhan also advocates for simplifying customs procedures through faster clearances, risk-based checks, and digital documentation to reduce delays and lower logistics costs for exporters.
On the domestic front, Chauhan recommends streamlining GST on jewellery, potentially reducing it to around 1% – 1.25%, to boost formal sales and widen the tax base. He also emphasises the early implementation of the Tourist GST Refund scheme at major airports to retain luxury spending within India. Additional support for skills development, infrastructure in export clusters, and industry formalisation could further strengthen India's position in global markets.
Diamond Segment Seeks Balanced Policy Support
In the diamond segment, industry leaders are seeking differentiated and balanced policy measures. Jignesh Mehta, MD and Founder of Divine Solitaires, notes that geopolitical uncertainty and price volatility continue to impact the natural diamonds industry. He urges the government to rationalise the 5% import duty on cut and polished diamonds and coloured gemstones to 2.5%, which could boost exports, employment, and local manufacturing. Mehta also commends the recent BIS notification differentiating natural from lab-grown diamonds, which has instilled trust and transparency among buyers.
Simultaneously, lab-grown diamonds are emerging as a sunrise segment. Anand Lukhi, Founder & CEO of Lukson, believes Budget 2026–27 should recognise this segment's strategic importance through duty rationalisation on raw materials and equipment, incentives for advanced manufacturing, and easier access to credit for MSMEs. Lukhi stresses the need for investment in design-led skilling and technology adoption to help India transition from volume-driven exports to high-value branded jewellery.
Collective Call for a Balanced Budget
Collectively, the industry is urging a balanced Budget that supports affordability, strengthens manufacturing and exports, and positions India as a global jewellery and diamond powerhouse in a rapidly evolving market. Targeted policy support could sustain domestic consumption, unlock household gold value, and enhance India's competitiveness across global jewellery and diamond markets.
Industry leaders argue that these measures can stimulate domestic demand, safeguard jobs, and sustain export growth amid external uncertainties. The upcoming Budget presents an opportunity to address these critical issues and foster long-term growth for the gems and jewellery sector.
