Budget Expectations 2025: Last year, reduction in import duty singlehandedly improved the market’s strength and demand for precious metals and fine jewellery. With prices becoming more affordable, demand for jewellery rose in the current fiscal year. Encouraging and empowering the industry further with initiatives such as SGB (sovereign gold bond), gold ETF, GMS (gold monetisation schemes) and the establishment of more refineries could significantly enhance the sector’s efficiency and reach. With the ‘Make in India‘ push for the sector, India may accomplish being a price setter in the global gold market.Furthermore, the banking sector’s increasing confidence in fine jewellery as a viable investment is a testament to the industry’s growing stature.Loans against gold jewellery in India increased by 50.4 per cent in the first seven months of FY 2024-25, outperforming single-digit growth in other personal loan categories. Outstanding gold loans stood at ₹1,54,282 crore as of October 18, 2024, which is a remarkable 56 per cent increase from ₹1,02,562 crore in March 2024.
The factors that are driving this growth include a shift of borrowers from NBFCs to banks, a preference for secured loans, and an increase in gold prices that enables loan renewals.
The capital markets have opened up positively for the jewellery industry, reflecting the sector’s growing maturity and appeal. Recent listings of jewellery companies have delivered remarkable performances, creating a ripple effect of trust and optimism within the industry. These successes highlight the sector’s increasing focus on compliance, transparency, and corporate governance. By aligning with global benchmarks and adopting organised practices, the industry is transforming into a more structured, transparent, and prosperous ecosystem. This newfound access to capital markets paves the way for many more players to leverage public funding, propelling the industry toward new horizons of growth and credibility.Gems and jewellery already account for about 5 per cent of total exports from India. With the depreciation of the rupee, exports have become even more lucrative. India can increase its self-reliance with further optimisation of old gold in the system, which can be possible with the government implementing favourable policies that allow the circulation of gold to boost consumption. Strategically, this might then make India an even more dominant player in international markets.
By fostering thoughtful policymaking and introducing initiatives that encourage innovation, resource optimization, and global competitiveness, the government has the potential to transform the Indian jewellery industry into a global leader. A budget that incentivizes sustainable practices, promotes exports and strengthens domestic demand will not only uplift the sector but also contribute significantly to the nation’s economic growth. With the right budgetary support, India’s jewellery industry can set new benchmarks of excellence, blending tradition with modernity, and shine as a true global powerhouse.
