What does the jewellery sector expect from Budget '24?

If you are thinking of buying gold, this news could be very useful for you. The budget for the financial year 2024-25 is set to be announced in just a few days. Finance Minister Nirmala Sitharaman will present the budget on July 23. In the meantime, the jewelry industry, is facing sluggish demand. It has demanded a reduction in the import duty on gold. If the budget considers the jewelers’ demand, gold buyers will get significant relief.

Rising gold prices are troubling both traders and common buyers. This is why the allure of gold among people has diminished. According to a report published in the Economic Times, gold demand in the country fell by up to 15% on a yearly basis in the April-June quarter. People are staying away from gold due to rising prices. With fewer wedding dates in July, chances are low that the demand for gold jewelry will pick up.

The report states that the price of gold is hovering around ₹73,000 per 10 grams. This is 15% higher compared to ₹63,870 per 10 grams at the beginning of 2024.

Meanwhile, according to the India Bullion & Jewellers Association Ltd, on July 12, the retail rate for 22-carat gold jewelry was ₹7,107 per gram or ₹71,070 per 10 grams. While the rate for 20-carat gold jewelry was ₹64,810 per 10 grams. This does not include 3% GST and making charges.

Budget demand to reduce import duty

According to another ET report, the jewelry industry has demanded the Modi government reduce the import duty on gold from 15% to 10% in this year’s central budget. Additionally, according to a PTI report, the Gem and Jewellery Export Promotion Council (GJEPC) has requested the import duty on gold be reduced from 15% to 4%. It has also requested for the custom duty on cut and polished diamonds be reduced from 5% to 2.5%.

According to ET’s report, citing the Chairman and Founder of Vighnaharta Gold, Mahendra Loonia, if the government agrees to these demands, it will boost the industry and may bring down gold prices. Lower gold prices could increase consumer demand and higher demand could lead to increased sales.

If Finance Minister Nirmala Sitharaman announces a reduction in the import duty on gold in the 2024 budget, it will be beneficial for both the industry and common customers. Lower gold prices could lead to increased jewelry purchases, which would benefit the businesses as well.

There are also reports of potential relief on the income tax front in the budget. The government is considering increasing the limit for standard deduction under the new tax regime from ₹50,000 to ₹75,000 or ₹1,00,000. This would reduce the tax liability for middle-class salaried individuals and increase their disposable income. This would also be good for the economy.