India increased the customs duty on articles of precious metals, including silver, from 20% to 25% on February 1, 2023.
India has raised the import duty on jewellery and articles made from precious metals to 25%, up from 20%, effective 1 February 2023.
The increase covers gold, silver and platinum items, as well as imitation jewellery. It widens the duty gap between finished goods and the raw metal bars to 10%, a move designed to push more production into domestic workshops.
The change is part of the 2023-24 Union Budget, published by the Ministry of Commerce & Industry on the evening of 1 February1. It comes alongside a package of measures aimed at boosting exports and manufacturing, including tax cuts on inputs for electric vehicles, mobile phones and shrimp feed.
For jewellery importers, the higher rate adds roughly $50 to the delivered cost of every $1,000 of goods inside the new tariff. The ministry said in a statement that the move would “discourage cheap imports from China and encourage domestic manufacturing”2.
The same budget also removed the 5% duty on lab-grown diamond seeds, the tiny slivers of diamond used as the starting point for synthetic stones. A separate HS code for lab-grown diamonds will be created to track trade in the sector1. The government has approved a ₹242 crore ($29.5m; £24m) research grant to the Indian Institute of Technology Madras over five years to develop home-grown production methods.
Other sectors see the opposite treatment. Import duty on fish meal, which makes up 40% of the cost of farmed shrimp, has been cut to 5% from 15%1. The ministry expects the lower rate to make Indian shrimp more competitive on global markets and to reduce overfishing of juvenile fish used in domestic feed production.
Duty on compound rubber, used in tyres and industrial belts, has jumped to 25% from 10%, a move intended to protect domestic natural-rubber farmers2. Components for mobile phones, lithium-ion batteries and open cells for television panels have all seen duty reductions, part of a push to integrate India more deeply into global electronics supply chains.
Who pays the new jewellery duty
The 25% rate applies to two broad groups of goods:
- Articles of precious metals (HS chapter 71), including rings, chains, bangles and other finished jewellery made from gold, silver or platinum.
- Imitation jewellery (HS 7117), which covers costume pieces made from base metals, glass or plastic.
Who pays the 25% duty
The duty is collected at the border on the declared customs value, which includes the cost of the goods, freight and insurance. Importers must now budget an extra 5% of that value on every shipment cleared after 1 February.
The ministry has not set any quota or exemption for the new rate. All shipments arriving on or after the effective date are subject to it, regardless of when the order was placed or the goods were shipped.
What the budget leaves unchanged
The duty on raw metal bars — gold, silver and platinum in bulk form — remains at 15%. The 10% gap between the bar rate and the finished-goods rate is now the widest it has been in a decade, giving domestic manufacturers a larger price advantage over imported jewellery.
Import duty by product, percent of customs value
Other jewellery-related inputs are unaffected. Diamonds, whether natural or lab-grown, continue to enter duty-free. So do most gemstones, pearls and synthetic stones used in jewellery production.
The budget also keeps the 10% duty on gold and silver coins, a rate that has been in place since 2013. That rate is lower than the new 25% on finished jewellery, so coins remain a cheaper way for consumers to buy precious metals.
The next date to watch
The budget documents do not set a review date for the new jewellery duty. The next scheduled opportunity for change is the 2024-25 Union Budget, expected in February next year.
The dates that bind
Until then, the 25% rate will stay in place, adding a fixed cost to every piece of imported jewellery. For high-volume importers, the change is large enough to shift sourcing decisions, but small enough that it is unlikely to trigger a sudden drop in shipments. The ministry’s stated goal — more domestic production — will depend less on the duty itself and more on whether Indian workshops can scale up quickly to fill the gap.
Sources
- ↩ Union Budget to give a boost to exports and manufacturing https://www.pib.gov.in/PressReleasePage.aspx?PRID=1895485
- ↩ निर्यात और विनिर्माण को बढ़ावा देने के लिए केंद्रीय बजट https://www.pib.gov.in/PressReleasePage.aspx?PRID=1895630