For consumers, lab-grown diamond jewellery is likely to remain the most attractively priced segment, with extended customs duty exemptions on diamond inputs. However, with no reduction in Basic Customs Duty (BCD) on gold and silver, especially when prices are high, jewellery prices will remain high.Budget has extended customs duty exemption till March 2028 on simply sawn diamonds (SSD), rough diamonds that have been sawn but not polished and on lab-grown diamond (LGD) seeds used in reactors. Effective duty on SSD was around 7%, while LGD seeds attracted a duty of 0.5%.“Consumers will get both lab-grown and natural diamonds at better prices. The extension will also sustain manufacturing and employment in Gujarat,” said CA Mihir Modi.In contrast, there will be little relief to those willing to buy precious metal jewellery. Gold and silver continue to attract an effective import duty of 6%, including 5% BCD and 1% Agriculture Infrastructure and Development Cess.“The absence of duty relief means consumers shouldn’t expect price moderation. Since domestic prices track international markets and outlook for both gold and silver remains upward, jewellery prices may increase,” said Haresh Acharya, director, India Bullion and Jewellers’ Association.Budget has also proposed exemption on gold and silver produced from copper anode slime that was exported for toll smelting and subsequently re-imported. However, players say this step is aimed largely at improving export competitiveness and will have negligible impact on domestic jewellery prices.“This will aid exporters and improve overseas competitiveness, but will have little impact on domestic jewellery prices,” Acharya added.
