On February 1, 2025, India’s Finance Minister Nirmala Sitharaman announced the Union Budget 2025, introducing measures that have significantly boosted the jewellery sector. Despite a broader market downturn, jewellery stocks have surged, reflecting investor optimism.
On February 1, 2025, Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025, introducing measures that have significantly boosted the jewellery sector in India. Despite a broader market downturn, jewellery stocks have surged, reflecting investor optimism.
Key Budget Announcements Impacting the Jewellery Industry
- Customs Duty Reduction: The government has reduced the customs duty on jewellery articles and parts from 25% to 20%, effective February 2, 2025. Additionally, the duty on platinum findings has been slashed from 25% to 5%, making imports more cost-effective and enhancing profitability for jewellery manufacturers and retailers.
- Tax Relief for Individuals: The new tax regime offers income tax relief for individuals earning up to ₹12 lakh, which is expected to boost household consumption, savings, and investment. This policy change has reinforced confidence in the jewellery sector, supporting stock prices despite the market downturn.
Pro-Business Measures Supporting the Jewellery Sector
- MSME Turnover Limit Increase: The turnover limit for Micro, Small, and Medium Enterprises (MSMEs) has been raised from ₹250 crore to ₹500 crore, allowing small and mid-sized jewellery manufacturers greater access to government schemes and credit facilities.
- Duty-Free Imports of Lab-Grown Diamonds (LGDs): The removal of Import General Manifest (IGM) conditions for duty-free imports of Lab-Grown Diamond (LGD) seeds is expected to increase demand for LGDs.
- Introduction of Separate HS Codes: The introduction of separate Harmonized System (HS) codes for platinum and gold alloys will help curb malpractices and ensure fair trade in the industry.
Jewellery Stocks Rally Amid Policy Boost
Following the Budget announcements, jewellery stocks surged, reflecting optimism over policy-driven growth. Notable movements include:
- Senco Gold: Jumped 8.6% to ₹510.25.
- Motisons Jewellers: Climbed 5% to ₹25.05.
- Kalyan Jewellers: Advanced 5% to ₹526.30.
- Titan Company: Rose 4% to ₹3,632.75.
- Thangamayil Jewellery: Added 2% to ₹1,865.
These gains highlight investor confidence in the jewellery sector, particularly as reduced import duties lower costs and enhance margins for major players.
Industry Expectations and Future Outlook
While the Budget measures have been welcomed, the industry had higher expectations that remain unaddressed. Stakeholders were hoping for a further reduction in gold import duty, which remains a key cost factor for jewellers. Additionally, there were calls for a dedicated regulator for digital gold to enhance transparency and investor trust. Another major demand was more favorable terms under the gold monetisation scheme, which aims to reduce reliance on imported gold by encouraging households to deposit idle gold with banks.
Despite these concerns, the customs duty cuts and tax benefits are seen as major growth drivers for the sector. The policies announced in Budget 2025 strengthen domestic demand, improve cost structures, and enhance investor sentiment, making jewellery stocks attractive investment opportunities despite overall market volatility.
