Gold import duty hike is ‘retrograde’, risks undermining industry: Apex body of Gems and Jewellery

New Delhi, May 13: As the government raised gold import duty to 10% from 5%, the Gem & Jewellery Export Promotion Council (GJEPC) today said the “retrograde step risks undermining our industry’s competitiveness at a critical time.”

In a statement, the apex body of the gems & jewellery industry representing 10900+ members in the sector, said its “consistent position” has been that “hiking import duties rarely curbs gold imports.”

“It merely inflates prices,” it said.

“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,” the grouping said.

“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,” it said.

GJEPC urges the Government to engage in dialogue for sustainable solutions that align fiscal goals with export growth.

The GJEPC said it convened a meeting yesterday with major retailers and manufacturers and has written to the Prime Minister, suggesting proactive measures to curb gold imports and bolster self-reliance:

The suggestions made by the GJEPC are:

• Promote sales of lower caratage jewellery (e.g., 18K, 14K) to reduce imports by 20-30%
• 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

 It said the GJEPC is submitting a detailed paper on revitalizing GMS for the Government’s consideration.

About GJEPC:

The GJEPC is th

Set up by the Ministry of Commerce, Government of India (GoI) in 1966, the GJEPC is one of several Export Promotion Councils (EPCs) launched by the Indian Government, to boost the country’s export thrust, when India’s post-Independence economy began making forays in the international markets.

Since 1998, the GJEPC has been granted autonomous status.

With headquarters in Mumbai, GJEPC has Regional Offices in New Delhi, Kolkata, Chennai, Surat and Jaipur, all of which are major centres for the industry.

It thus has a wide reach and is able to have a closer interaction with members to serve them in a direct and more meaningful manner.

Over the past decades, GJEPC has emerged as one of the most active EPCs and has continuously strived to both expand its reach and depth in its promotional activities as well as widen and increase services to its members.