The Union Budget for 2021-22 got tabled recently and the Indian finance minister, Nirmala Sitharaman came up with some welcome moves for the jewellery industry. Though the budget focused on pushing for infrastructure development, some steps have been taken to bail out the pandemic hit industry sector. We got in touch with some big names in the jewellery industry to share reactions on the latest budget and how it will affect or boost the gem and jewellery industry.
Reduction in customs duty
This year’s budget has reduced the customs duty on gold as well as other precious metals. The reduction has been made from existing 12.5 percent to 7.5 percent, and this move is touted to bring down the retail prices, but boost export of jewellery and curb smuggling.
“The duty reduction is a good initiative and a support by the Govt to reduce unofficial smuggling. It will help the sector to be more organized. The responsibility of SEBI to manage bullion exchange implementation will help in making the gem and jewellery sector more organized. It is a good initiative by the Govt to take care of consumers, companies, manufacturing sector and karigars (artisans) as well, feels Suvankar Sen, CEO, Senco Gold and Diamonds.
This year’s budget seems to be growth oriented, for the gems and jewellery sector, feels Arpit Goyal, owner of Ambrus Jewels. “The reduction in import duty from 12.5% to 7.5% on precious metal and gold is a big move for the industry. It will also reduce smuggling. This move will also help in reduction of disparity in gold pricing in India v/s other international markets,” says Goyal.
“Good amounts of investment into banks, infrastructure and agriculture will lead to better liquidity, resulting in better spending by the consumers. The budget is also in favour of the NRIs to invest money into the country and this will benefit the jewellery sector,” adds Goyal.
Boost to imports
Popular jewellery designer Archana Aggarwal is of the opinion that the budget reforms are a welcome move and will help in boosting jewellery imports. “India is the largest importer of gold, which primarily caters to demand of the jewellery industry. The revision of the import duty in Budget 2021 is earnestly welcomed by the jewellers as it will not only impact the domestic market but also boost exports of gems and jewellery.
Still a long way ahead
Though most jewellers have hailed the steps, Dr C Vinod Hayagriv, Director and Managing Director, 150 years C Krishniah Chetty Group Of Jewellers opines that a lot more needs to be done for the jewellery industry in the near future.
“The duty reduction is marginal. Should have been more drastic. With increase in smuggled and hoarding of gold, the government would have done better to have slashed customs duty on gold to 4%,” suggests Hayagriv.
Dr Hayagriv digs deeper into the reforms and says, “When every gram of gold is imported, through precious foreign exchange, the government ought to ensure that raw material, that is bullion, is only sold to GST registered entities. Gold raw material ought not to be hoarded. Most gold bullion is purchased with cash, and unaccounted money. This must be stopped immediately. That will save the country an estimated 150 tons of imports. Do the math!”
Well, with just a month into the new year, we hope the suggested reforms will be taken into consideration and provide a much needed boost to the gem and jewellery industry.