Whalesbook
### Pre-Budget Push for Sectoral Growth
Ahead of the Union Budget 2026-27, industry bodies representing India's gold, gems, jewellery, and mining sectors are collectively advocating for a suite of policy adjustments and fiscal measures. The underlying objective is to foster sustained growth, enhance global competitiveness, and unlock untapped domestic potential. Market participants are keenly observing the government's stance on gold, not just as a savings vehicle but also as a significant portfolio asset, with calls for stability in import duties and taxation to prevent market volatility.
### GST Relief and Export Competitiveness
The jewellery sector is at the forefront of demands for targeted tax rationalization. The All India Gem & Jewellery Domestic Council (GJC) has formally proposed reducing the Goods and Services Tax (GST) on gold and silver jewellery from the current 3% to between 1.25% and 1.5%. This adjustment is seen as crucial for alleviating working capital pressures and stimulating demand, particularly in middle-income and rural markets. Neil Sonawala, Chairman of Zen Diamond India, believes that rationalizing import duties on gold and diamonds, alongside incentives for organized retail, is essential for maintaining the sector's projected 8-10% annual growth [cite: not explicitly stated for a future period, but implied by current growth drivers].
Beyond domestic sales, export competitiveness is a critical focus. Colin Shah, MD of Kama Jewelry, has called for a predictable tax regime for rough, cut, and polished diamonds, coloured gemstones, and jewellery manufacturing. Simplified norms for permissible losses and SEZ property tax relief are also on the agenda. Jignesh Mehta, MD and Founder of Divine Solitaires, urged for reduced import duties on cut and polished diamonds and coloured gemstones to solidify India's position as a global diamond hub, thereby boosting exports and employment. The Gem and Jewellery Export Promotion Council (GJEPC) has similarly pushed for duty rationalization to make Indian exports more cost-efficient. The broader gems and jewellery market is forecast for robust growth, with projections ranging from USD 128 billion by 2029 to USD 227.66 billion by 2033, indicating a CAGR between 8.9% and 9.5%.
### Unlocking Household Savings and Digital Gold
Industry leaders are highlighting the vast quantum of household gold held passively. Mahendra Luniya, Chairman of Vighnharata Gold, advocates for government promotion of digital gold adoption. Furthermore, he suggests reconsidering the reintroduction of Sovereign Gold Bonds (SGBs), which historically channelled household savings into productive economic uses without a direct fiscal burden. SGBs offer an annual interest of 2.5% and tax-free capital gains upon maturity. Digital gold, he posits, could unlock significant liquidity, aligning with national economic growth aspirations.
### Critical Minerals: A Push for Self-Reliance
The mining sector's primary concern is establishing a self-reliant ecosystem for critical minerals. Hanuma Prasad Modali, MD & CEO of Deccan Gold Mines Ltd., has emphasized the need for expedited project approvals, time-bound land and forest clearances, and enhanced access to high-resolution geological data. Broader import duty rationalization for critical minerals is also requested to improve project economics and domestic processing capabilities. Deloitte India has also recommended that the budget expand its focus beyond exploration to include targeted support for the processing and recycling of critical minerals and rare earths, alongside risk-mitigation mechanisms for overseas mineral assets. The National Critical Minerals Mission (NCMM), approved with a significant outlay, provides a strategic foundation, but industry stakeholders are seeking clearer operational frameworks and regulatory clarity to attract private capital and technology partnerships.