Gold Import Duty Hike Sparks Export Fears and Smuggling Risks

India’s jewellery sector is facing fresh uncertainty after the recent gold import duty hike triggered concerns among exporters and industry bodies. The Gems and Jewellery Export Promotion Council (GJEPC) has warned that higher import duties on gold could negatively impact jewellery exports, increase smuggling activities, and create financial pressure for MSMEs operating in the sector.

According to industry experts, the rise in import duty has significantly increased raw material costs for jewellery manufacturers and exporters. This could make Indian exporters less competitive in the international market, especially against countries offering lower production costs and more stable trade policies.

The Indian gems and jewellery industry is one of the country’s major export contributors and provides employment to millions across manufacturing, retail, and export businesses. However, rising costs linked to the gold price, jewellery exports, and precious metals trade are now creating uncertainty across the sector.

GJEPC also warned that higher import duties could encourage illegal gold inflows and smuggling activities, which may hurt legitimate businesses and reduce government revenue collection. Industry leaders believe that balancing import duties with export competitiveness will be critical for sustaining growth in India’s jewellery sector.

The concerns come at a time when PM Modi’s appeal to avoid non-essential gold purchases has already sparked discussions around gold demand and consumption patterns in the country. Exporters and traders are now closely watching future policy decisions that could impact India’s overall commodity market and jewellery trade ecosystem.

Experts say stable policies and lower compliance pressure will be necessary to maintain India’s strong position in the global gems and jewellery market.