Union Budget 2023: Import duties increased on gold, silver and platinum, reduced on diamond seed

The Union Budget 2023 presented by Finance Minister Nirmala Sitharaman has brought about significant changes to the import duties on various goods. While the import duty on diamond seeds has been reduced, the customs duty on gold, silver, and platinum has been hiked to 10 per cent. This step is aimed at promoting domestic production and cementing India's position as a leader in the cutting and polishing of natural diamonds.

The increased customs duty on gold and platinum bars and articles made from them will lead to a rise in the prices of these precious metals. Similarly, the import duties on silver bars, strings, and other items have also been raised to match those of gold and platinum, thereby encouraging domestic production.

India is currently the third largest physical silver investment market in the world, and due to a rise in jewelry consumption, the country's silver imports are expected to reach a record high of 8,000 tonnes in 2022. The elimination of import duties on diamond seeds will aid India in becoming a dominant player in the cutting and polishing of natural diamonds, which accounts for nearly three-fourths of the global market value.

In addition, government has reduced the import duty on seeds used to produce laboratory-grown diamonds. This reduction will make the diamond production process more cost-effective, thus fostering the growth of the nation's diamond industry. Lab-made diamonds are created in a controlled laboratory setting using advanced technology and are chemically, physically, and optically identical to naturally occurring diamonds and are a lot more cheaper than the natural diamonds.

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