Jewellery Industry Backs Nation First Call but Warns of Export Challenges After Duty Hike

Surat | Gujarat — India’s gems and jewellery sector has responded cautiously to the government’s decision to increase gold import duty from 5% to 10% and agri cess from 1% to 5%, with industry leaders expressing support for national economic priorities while warning of serious implications for exporters and MSMEs.

The Gem & Jewellery Export Promotion Council (GJEPC) said it stands committed to the “Nation First” approach articulated by Narendra Modi and has already convened a high-level meeting with major retailers and manufacturers to chart a response strategy.

“We have written to the Prime Minister outlining proactive measures to curb imports and boost self-reliance,” the council said in a statement.

Industry Offers Measures to Reduce Gold Imports

Among the key proposals submitted to the government are promoting lower carat jewellery such as 14K and 9K products, encouraging consumers to exchange old gold for new jewellery, and revamping the Gold Monetisation Scheme to tap India’s estimated 25,000 tonnes of idle gold reserves. The council also suggested discouraging investments in gold bars and coins and introducing a special policy framework to support exporters in earning foreign exchange.

However, the industry warned that import duty hikes rarely reduce demand and instead increase costs and risks. “Despite gold prices doubling recently, imports have not fallen proportionally. Higher duties often fuel smuggling and raise export costs,” the statement noted.

MSMEs Face Liquidity Pressure

A major concern flagged by GJEPC is the working capital burden on exporters, who now require bank guarantees of ₹28–30 lakh per kg of duty-free gold from nominated agencies.

“The most severe impact will be on MSME manufacturers — the backbone of our sector — who are already facing a critical liquidity crunch,” the council stated, urging dialogue with policymakers to find sustainable solutions.

GJC Calls for Calm and Confidence

Meanwhile, All India Gem and Jewellery Domestic Council (GJC) Chairman Rajesh Rokde described the duty hike as a “temporary and calibrated measure” taken in the national interest.

“The trade should remain calm and confident. India’s jewellery sector has always shown resilience during challenging times,” he said.

GJC Vice Chairman Avinash Gupta echoed the sentiment, emphasising that the industry remains committed to working closely with the government to protect artisans, traders, and consumers while ensuring long-term growth.