As the Union Budget 2025 approaches, the jewellery industry is keenly anticipating reforms that could boost growth and formalize the sector. With the Budget scheduled for February 1, industry leaders are optimistic about measures to enhance gold monetization schemes, which aim to unlock the vast reserves of idle gold held by households and institutions. These schemes are viewed as a way to turn unused gold into productive assets, reducing the country’s gold import bill and easing the current account deficit.
MP Ahammed, Chairman of Malabar Group, highlighted the positive impact of the gold import duty cut in the Union Budget 2024 and emphasized the need for policy continuity to further boost consumer demand. The jewellery industry expects the Budget to focus on tax relief measures aimed at increasing disposable income and consumer spending. Such measures could help counter inflationary pressures that may dampen consumption. Additionally, Ahammed called for steps to make the gold monetization scheme more attractive to individuals, potentially leading to greater participation in the formal gold economy.
Further, the Budget is expected to propose ways to make the gold monetization process more accessible, including revisions to facilitate participation by recognized and reputed retail jewellers. This could also curb unaccounted business in the sector, ensuring more transparency and formalization. Industry experts believe these steps would not only enhance market growth but also improve the overall efficiency of the gold market.
The jewellery sector also hopes for continued capital expenditure on infrastructure development, which could help organized retail jewellery businesses expand their market presence and tap into new demand centres across the country.
In a noteworthy development, India’s gold import figures for November 2024 were sharply revised, with the total imports for January to November 2024 adjusted down from 796 tonnes to 664 tonnes. This $5 billion revision marks one of the largest adjustments for any commodity in history and highlights the importance of accurate data reporting. The original inflated figures had caused concerns due to a record surge in gold imports, contributing to a wider trade deficit.
India remains the world’s second-largest gold consumer, with imports playing a significant role, especially during the wedding and festive seasons. Industry stakeholders believe that improving the accuracy of data reporting and enhancing the gold monetization schemes will help improve transparency and efficiency in the gold market, ultimately benefiting both the sector and the broader economy.
