Budget 2017: Govt may cut gold import duty, announce incentives for gems and jewellery

New Delhi: The government is expected to announce steps like cut in the gold import duty and incentives to set up gems and jewellery parks in the next Budget to promote growth of the industry.

The commerce and industry ministry has discussed and suggested its finance counterpart several steps for the sector such as "cut in gold import duty, a gold policy and support for setting up of jewellery parks," sources said.

The industry has demanded cut in the import duty from the current 10 percent to 2 percent. It has time and again stated that reduction in the taxes would help check shift of business to neighbouring countries and smuggling.

The demands for setting up of jewellery park was in line with the Information Technology parks.

These parks get support in terms of easy labour policy, single window clearance of projects besides fiscal and non- fiscal support.

The sector assumes significance as it is a labour intensive area. The gems and jewellery sector contribute around 6-7 percent of the country's GDP. It also significantly contributes to the country's foreign exchange earnings. It gives employment to over three million people.

To curb grey market and boost the organised players, the Gem and Jewellery Export Promotion Council (GJEPC) is expecting that the government may reduce the import duty on gold to around 5 percent in the Budget.

According to reports, demonetisation would have impact on the gems and jewellery sector.