Daijiworld Media Network - New Delhi

New Delhi, Oct 16: The Central government on Friday reduced duty drawback rates for the export of gold and silver jewellery and other precious metal products, a move that could affect the profit margins of Indian jewellery exporters.

According to a notification issued by the Ministry of Finance, the duty refund on gold jewellery has been reduced by around 3.1 per cent, while the refund on silver jewellery and other silver products has been cut by approximately 9 per cent.

Following the revision, the duty drawback rate for gold jewellery exports has been reduced from Rs 1,851.99 per gram to Rs 1,794.11 per gram.

The reduction is more significant for silver-based products, with the rate for silver jewellery and other silver items lowered from Rs 29,501.09 per kg to Rs 26,859.02 per kg.

The revision will reduce the refunds available to exporters compared to the earlier rates, potentially putting pressure on their profit margins.

Duty drawback is a mechanism through which exporters receive refunds of customs and other duties paid on raw materials and inputs used to manufacture goods intended for export. The scheme aims to improve export competitiveness and ease the burden of production costs.

In July this year, the government had provided relief to the jewellery export sector by substantially increasing the duty drawback rates.

At the time, amid rising costs and global uncertainties, the refund rate for gold jewellery was raised from Rs 773.17 per gram to Rs 1,851.99 per gram.

Similarly, the rate for silver products was increased from Rs 14,990.66 per kg to Rs 29,501.09 per kg.

However, industry experts believe the impact of the latest reduction on exports could remain limited if demand in the global market continues to be strong.