Budget 2022: Import Duties on Polished Diamonds and Gemstones Slashed
The gems and jewellery sector makes up a 9.6 per cent share of India’s entire exports basket between April and December 2021, accounting for the third-largest commodity share. India’s exports of gems and jewellery shot up by a whopping 71 per cent during the first three quarters of the current financial year from April to December 2021(provisional) over the same period the previous year. In the month of December 2021 alone, India exported gems and jewellery worth $ 2.99 Bn, registering a growth of 16.38 per cent over $ 2.57 Bn in December 2020.
The finance minister underpinned growth in this sector by announcing a reduction in customs duty on cut and polished diamonds and gemstones from the current 7.5 per cent to 5 per cent. To disincentivise the import of undervalued imitation jewellery, the customs duty on imitation jewellery is being prescribed in a manner that a duty of at least INR 400 per kg is paid on its import. A simplified regulatory framework is expected to be implemented by June 2022 to facilitate the export of jewellery through e-commerce.
With these measures, the Union Budget 2022-23 promises to be a harbinger of investment growth and export promotion in this sector.
This article was authored by Bhavya Tyagi.