The Indian government has significantly increased duty drawback rates for gold and silver jewelry exports to support exporters. Gold jewelry duty drawback is now ₹1,851.99 per gram, while silver jewelry is set at ₹29,501.09 per kilogram. This policy shift aims to offset higher input costs and improve the global price competitiveness of domestic jewelry exporters.
The Department of Revenue has announced a substantial hike in duty drawback rates for gold and silver jewelry exports, providing relief to manufacturers and exporters facing rising costs. A duty drawback is a refund of certain duties and taxes paid on imported inputs used in the production of export goods. This mechanism is designed to ensure that Indian exporters can compete fairly in international markets by not carrying the burden of domestic taxes on their exported products.
Under the latest notification effective July 17, 2026, the duty drawback rate for gold jewelry and its components has been revised to ₹1,851.99 per gram, compared to the previous rate of ₹773.17 per gram. For silver jewelry and silver articles, the rate has been adjusted to ₹29,501.09 per kilogram, up from the earlier ₹14,990.66 per kilogram. These changes apply to jewelry and articles produced using imported gold or silver as raw material.
Impact on Exporter Working Capital
This revision comes after sustained requests from the gems and jewelry industry. Exporters had reported that the previous reimbursement rates were inadequate, especially as global prices of precious metals climbed sharply over the past two years. When the government's reimbursement of embedded taxes does not keep pace with the actual cost of inputs, exporters often see their working capital blocked, which can limit their capacity to fulfill large orders or manage their inventory efficiently. By bringing these rates closer to current market costs, the government aims to ease this financial pressure and potentially improve profit margins for firms heavily engaged in international trade.
Sector and Market Context
India is one of the world's largest consumers and exporters of gold jewelry, with major export hubs in cities like Mumbai, Surat, and Jaipur. The industry is highly sensitive to fluctuations in the price of precious metals and changes in import duties. While this policy change is intended to support the competitiveness of Indian products, the ultimate benefit to individual companies will depend on their scale of exports and the specific composition of their raw material imports. Investors in companies with significant export-oriented jewelry operations may look for updates on how this policy impacts cash flow and operating efficiency in upcoming quarterly results. The core eligibility criteria for the scheme remain unchanged, meaning exporters will need to continue following standard regulatory procedures to claim these benefits.