Budget 2026: What gems & jewellery sector expects amid challenging trade landscape; check the full wishlist

The Gem and Jewellery Export Promotion Council (GJEPC), in its pre-Budget recommendations to Finance Minister Nirmala Sitharaman, has made several proposals to make Indian exports more cost-efficient and position India as a diamond trading and value-discovery centre.

"The global gem and jewellery trade is undergoing a major transformation. With high US tariffs, evolving consumer preferences, and shifting global supply chains, it is imperative that India maintains its competitive edge," GJEPC chairman Kirit Bhansali said.

Bhansali further noted that the pre-Budget proposals are focused on making Indian exports more cost-efficient, strengthening SEZ operations, and improving policy frameworks that encourage investment and skill development.

He said, with supportive reforms and a stable trade ecosystem, India can not only weather current global challenges but also lead the next phase of growth in the international jewellery market.

Safe Harbour tax

The current 4% Safe Harbour tax is considered too high and deters international trade, GJEPC said, and urged the government to rationalise import duties on cut and polished diamonds and coloured gemstones to help Indian exporters remain globally competitive.

Changes in Customs Act, 1962

GJEPC has urged the need to amend the Customs Act, 1962, to align customs processes with the requirements of a fast-evolving, export-driven gems and jewellery sector.

The Council has recommended reforms such as risk-based customs clearance, AI-enabled digital appraisals, and self-certification for trusted exporters to improve speed, transparency, and cost efficiency.

What GJC expects

The All India Gem and Jewellery Domestic Council (GJC), in a representation to the government, has urged for GST reforms, hallmarking, reforms to direct taxes, and industry-wide improvements.

"GST on gold and silver jewellery should be rationalised to 1.25% from 3%, which will help restore proportionality, reduce financial stress on households, and enable a wider base of taxed transactions," GJC chairman Rajesh Rokde said.

Tax changes

GJC also proposed an exemption from capital gains tax on the exchange of hallmarked jewellery, where the sale proceeds are immediately reinvested in the purchase of new jewellery, maintaining the continuity of asset holding.

Tourist GST Refund Scheme

The Council urged to operationalise the Tourist GST Refund scheme at the earliest by issuing the requisite rules and establishing digital claim and verification mechanisms at major international gateways.

A phased pilot may be launched initially at Delhi, Mumbai and Bengaluru airports, where both jewellery sales and foreign tourist footfall are highest, GJC stated.

"Foreign tourists, particularly from the Middle East, Europe and the United States, face a tax-inclusive price disadvantage while purchasing jewellery in India as compared to regional competitors like the UAE and Singapore, where such refunds are efficiently processed through automated airport systems.

"This leads to a lost opportunity for India wherein foreign buyers either defer purchases or procure jewellery abroad, converting India's competitive craftsmanship into exported retail demand losses," Rokde added.

India Gems & Jewellery Exports

India's gems and jewellery exports grew 19.64% to $2.5 billion in November 2025 compared to the same month last year, according to GJEPC.

Total exports stood at $2.1 billion during the corresponding month of the previous year, according to GJEPC data.

The overall exports of gems and jewellery were flat at $18.86 billion during the April-November period as compared to $18.85 billion in the same period of last year.

The overall gross export of cut & polished diamonds was at $919.74 million in November as compared to $666.34 million in the same period of the previous year.