Tiruchi jewellery industry set to regain its shine with reduction in import duty on precious metals

The jewellery industry, which has suffered from record high prices in recent years, has a chance to regain its shine once the cuts in import duties on gold, silver and platinum announced in Tuesday’s budget come into effect, industry representatives say.

The basic duty on gold and silver has been reduced from the previous rate of 15% to 6%, and on platinum to 6.4%.

“Customers will benefit from reduced rates. We have already seen a drop of around ₹250 per gram compared to the prices a few days ago. Once the budget policy is analysed and implemented in the market, there is a chance that precious metal jewellery will become affordable to a wider audience,” said Sylvester, showroom manager at a jewellery showroom in Tiruchi This Hindu.

Even though the Tamil month of Aadi is traditionally a low season for jewellery trade, buyers continue to make purchases irrespective of the prices, based on their needs, he added.

Market sources say that small savings schemes on jewellery in brick-and-mortar stores will also gain popularity once the tariff cuts come into effect.

“One can expect gold prices in the IA to fall by as much as ₹450 per gram. However, it is doubtful whether this will happen immediately as many traders have stocks bought at the old duty rates,” said M. Chandrasekhar, senior president, Tiruchi Jewellers’ Association.

It is estimated that there are at least 500 jewellery shops in Tiruchi now. Mr. Chandrasekhar said the decline in the Kaveri delta’s agricultural sector has affected the purchasing power of rural customers.

Diljit Shah, another jeweller, said the reduction in import duty was a welcome move. “When jewellery is made available at affordable prices in the country, smuggling and hoarding of precious metals will definitely come down,” he said.