By Dr. Renisha Chainani, Head- Research, Augmont – Gold for all

Jewelers, Jewellery Associations, Bullion Traders, Bullion Refiners, etc, and most of the Bullion market participants have a lot of expectations from the Budget every year for the development of the Bullion Industry. Here is the list of the top five expectations from this budget:

 

	Budget Expectation	Current Scenario	Reasoning for change required
1)	Reduction in Import Duty on Gold and Silver from 6% to 3%	In Budget 2024 the import duty for gold and silver was cut from 15% to 6%, narrowing the duty gap between India and other countries, which led to a big jump in demand.	Further duty is expected by market participants to make India’s jewellery exports more competitive. But I feel, there won’t be any duty cut in this budget, after 9% duty cut six months back.
2)	Reduction in import duty for Dore Gold and Silver	India’s gold refining capacity is 1800 tonnes per annum, out of which 250 tonnes of dore gold is refined, which means capacity utilization is just 15%. Dore Gold and Silver are imported at 5.35% while refined gold is imported at 6%, which means the duty difference/refining margin is just 0.65%, which is very less.	Bullion refiners have been working on this paper-thin margin of just 0.65% since 2016. This margin should be increased by at least 1% to encourage gold refining in India by reducing the import duty on dore imports.
3)	Appointment of a single regulator for the gold market.	The bullion market is regulated by SEBI, RBI, DGFT, Ministry of Finance, Ministry of Commerce, etc., currently and all regulatory frameworks/ announcements impact the market.	A uniform regulatory framework has the potential to simplify supervision while increasing market efficiency and transparency.
4)	Special benefits for gold import and exports via IIBX.	Since its launch in 2022, the IIBX at GIFT City has been developing as a gateway for importing bullion. This platform for storage and trading in gold and its derivatives has become a significant route for gold imports into India. IIBX gold imports have grown from 411 kg to 67827 kg in the last three years.	The industry feels the time is right to give IIBX more teeth, like a special benefit of 0.5% for gold imports via IIBX. Also, IIBX should be considered as a Jewellery Export centre, which will enhance the gold market and contribute to economic growth.
5)	Regulation in the Digital Gold Market	Digital Gold is a more than 10-year-old gold investment option in India, which is self-regulated. With India getting more digital, GenZ and Millennials are moving towards buying Digital Gold at their fingertips due to its propensity of affordability, accessibility, convertibility, transparency and security.	According to WGC, over 12 crore customers have engaged in digital gold transactions, with approximately 4 crore currently holding digital gold. A regulator can bring integrity, consumer protection and trust among investors by facilitating micro-savings and deterring fraudulent activities.

 

 

 

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