The jewellery industry is optimistic about a boost in demand and a reduction in smuggling following the reduction in customs duty on gold, silver and platinum.

“To enhance domestic value addition, in gold and precious metal jewellery in the country, I propose to reduce customs duty on gold and silver to 6 per cent and that on platinum to 6.4 per cent,” Union finance minister Nirmala Sitharaman said on Tuesday.

The import duty on gold and silver bars was 15 per cent, while that on platinum was 15.4 per cent.

“For the gold industry, the reduction in basic customs duty on gold and Agriculture Infrastructure & Development Cess (AIDC) will boost the overall competitiveness of the domestic jewellery industry. It will effectively reduce the overall taxes on gold from around 18.5 per cent (including GST) to 9 per cent. It’s a massive step in right direction, as it will reduce the incentives for smuggling of gold. It will create a level playing field for honest industry stakeholders,” said Sachin Jain, regional CEO, India, World Gold Council.

“Gold prices will also correct locally, thereby giving a boost to retail gold demand – another incentive to the Indian gold industry,” Jain said.

“The reduction in import duties is a major boost for our industry, enhancing affordability for consumers and competitiveness for the manufacturing sector by releasing working capital. The abolition of the 2 per cent equalisation levy and introduction of the Safe Harbour Rule on sale of rough diamonds at SNZs will firmly establish India as a global rough diamond trading hub,” said Vipul Shah, Chairman, GJEPC,

“These combined measures will propel the sector’s growth, generate lakhs of employment opportunities by benefiting the small-scale jewellery manufacturers & exporters and diamond cutters and polishers, thus contribute significantly to India’s vision of becoming a Viksit Bharat by 2047,” Shah said.

“Reduction in customs duty on gold and silver is a huge boost to the industry resonating with the Atmannirbhar and Make in India agenda of the government. The reduction in import duty will also give customers a major confidence in purchasing gold,” said Annargha Uuttiya Chowdhury, director, Anjali Jewellers Private Limited.