The Union Budget 2026 allows Special Economic Zone (SEZ) units to sell gems and jewellery in the domestic market at concessional duties, helping manufacturers utilise idle capacity amid falling exports | Photo Credit: SHASHI ASHIWAL/businessline

The Budget’s move to allow units in Special Economic Zones to sell in the domestic markets will help jewellers who have been hit by falling exports due to geopolitical issues. They will also be able to utilise idle capacity.

While overall gem and jewellery exports between April and December were flat year-on-year at $20.75 billion, exports to the US plunged 44 per cent to $3.86 billion ($6.95 billion) during the same period, due to punitive tariffs.

One-Time SEZ Measure

To address concerns about the utilisation of capacities by manufacturing units in SEZs due to global trade disruptions, the Budget has proposed a special one-time measure to facilitate sales by eligible manufacturing units in SEZs to the Domestic Tariff Area (DTA) at concessional rates of duty.

The quantity of such sales will be limited to a prescribed proportion of manufacturers’ exports. Necessary regulatory changes will be undertaken to operationalise these measures while ensuring a level playing field for the units working in the DTA, it added.

Industry Reaction

Kirit Bhansali, Chairman of the Gem and Jewellery Export Promotion Council, said limited sales from SEZs to the Domestic Tariff Area at concessional duties will enable factories to use idle capacity, safeguard jobs, and strengthen trade amid US tariffs and global demand volatility.

E-Commerce Boost

He pointed out that the removal of the ₹10 lakh cap on courier exports is a big boost for e-commerce, enabling MSMEs, artisans, and small jewellery brands to reach global buyers directly, with smoother returns handling and quicker turnaround times.

Lab-Grown Diamond Support

Extending the duty-free import of lab-grown diamond seeds and Sawn Diamonds till March 2028 is a timely and practical step. It keeps input costs low, supports production and exports. It also safeguards a fast-growing segment where India already leads globally, helping secure the future of our industry, said Bhansali.

Enhanced Capacity Utilisation

Colin Shah, MD, Kama Jewelry said the introduction of a special one-time facility for SEZ units to supply to the DTA at a concessional rate of duty will enhance capacity utilisation.

The support for SEZ units selling into the domestic market, along with continued backing for diamonds and lab-grown diamonds, gives a real boost to manufacturing and trade, he said.

Keeping import duties on gold and silver unchanged will give the sector a much-needed stability and drive sustainable growth, said Shah.

Published on February 2, 2026