Government Raises Duty Drawback Rates on Jewellery
According to a notification issued by the Department of Revenue, the duty drawback rate on silver jewellery and articles of silver has been increased from ₹335.50 to ₹466.76 per 10 grams. The rate on gold jewellery and articles of gold has been raised from ₹4,468.10 to ₹5,234.00 per 10 grams. The relief on platinum jewellery and articles of platinum has also been revised upwards from ₹4,468.10 to ₹5,234.00 per 10 grams.
US Tariffs Hit Indian Exports
US president Donald Trump’s administration has imposed a reciprocal tariff of 25% on Indian goods entering America and an additional 25% for New Delhi’s purchases of Russian oil. These tariffs come into effect on Wednesday.
Duty Drawback: A Cushion for Exporters
The duty drawback scheme rebates the incidence of Customs and Central Excise duties, chargeable on imported and excisable material respectively when used as inputs for goods to be exported. The revision comes at a time when India’s jewellery exports are under pressure from slowing global demand and changing sourcing norms in key markets. Exporters have long sought higher drawback rates to offset rising input costs, especially for gold, silver and platinum, which form the backbone of the industry.
India’s Jewellery Export Performance
India is one of the world’s largest exporters of gems and jewellery, with the US being its biggest market. In FY25, exports from the sector to the US stood at $9.94 billion, marginally up from $9.91 billion in FY24. Shipments to the US accounted for about 33% of India’s total gems and jewellery exports, which were valued at $29.80 billion in FY25. However, shipments to the US and EU have slowed in recent months due to tariff uncertainties and softer consumer spending.
Exporters Welcome the Move
Exporters are of the view that the increase in duty drawback rates would partly cushion the impact of higher costs and provide a competitive edge at a time when rivals such as Turkey and Thailand are aggressively pushing their jewellery exports. “While this is a welcome step, further support will be needed in the coming months to sustain export momentum,” said Vipul Shah, former chairman of the Gem and Jewellery Export Promotion Council.
Central Government Steps In
The revision has come on the back of exporters facing a 50% tariff on shipments to the U.S.A, which is India’s second-largest market for gems and jewellery. The sector exported $9.94 billion worth of goods to the U.S. in FY25, nearly one-third of India’s total gems and jewellery exports of $29.8 billion.
Notification on Revised Rates
As per a Department of Revenue notification, the duty drawback on silver jewellery has been increased from ₹335.50 to ₹466.76 per 10 grams, while the rate for gold and platinum jewellery has been raised from ₹4,468.10 to ₹5,234 per 10 grams.
Industry Reaction and Future Outlook
Industry representatives have welcomed the move, saying it provides some relief, but stressed that sustained support will be necessary to maintain competitiveness against rivals like Turkey and Thailand, which enjoy lower tariff barriers.
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