Centre Hikes Duty Drawback On Jewellery To Soften US Tariff Blow

(MENAFN- Live Mint) New Delhi: The government has raised duty drawback rates on certain jewellery and precious metal items to provide relief to exporters in the sector, which has been hit hard by the steep US import taxes.

According to a notification issued by the Department of Revenue on Monday, 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.

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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.

Earlier, Mint reported on 13 August that the government was preparing a package under its Export Promotion Mission, including higher drawback rates, facilitation of export credit, and support for small businesses. The latest revision is seen as part of this initiative, which is aimed at cushioning the impact of US tariff hikes and strengthening India's global competitiveness, particularly in the jewellery sector.

Relieving pressure

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.

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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 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.

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