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The Gem & Jewellery Export Promotion Council (GJEPC) acknowledges the Government's decision to raise gold import duty to 10% from 5% and Agri cess to 5% from
1%. As an industry, we remain committed to the spirit of 'Nation First' echoed by Honourable Prime Minister Shri Narendra Modi. In response to his call, GJEPC convened a meeting yesterday with major retailers and manufacturers. We have written to the Prime Minister outlining proactive measures from our members to curb gold imports and bolster self-reliance:
- Promote sales of lower caratage jewellery (e.g., 18K, 14K) to reduce imports by 2030%
- Encourage consumers to exchange old gold for new jewellery making, further decreasing import dependence.
- Revive the Gold Monetisation Scheme (GMS) in a more viable form to tap India's 25,000 tonnes of grandfather stock.
- Discourage investment in gold bars, billets, and coins, which account for 20-30% of total imports.
- Provide special incentives for gold jewellery exporters to earn precious foreign exchange amid economic challenges.
We are submitting a detailed paper on revitalizing GMS for the Government's consideration.
That said, GJEPC's consistent position is that hiking import duties rarely curbs gold imports—it merely inflates prices. Despite gold prices doubling recently, imports have not declined proportionally. Such measures often fuel smuggling and escalate export costs. Exporters now face Bank Guarantees of ₹28-30 lakhs per kg of duty-free gold from Nominated Agencies, severely blocking working capital and stifling exports.
The most severe impact of this policy will be felt by MSME manufacturers, who are the "backbone" of our industry, accounting for 80% of GJEPC’s membership, who are currently facing a critical liquidity crunch.
This retrograde step risks undermining our industry's competitiveness at a critical time.
GJEPC urges the Government to engage in dialogue for sustainable solutions that align fiscal goals with export growth.
