Budget 2023 | Silver to get costlier as govt. raises basic customs duty to 10%

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Silver and silver jewellery will become expensive as the government on Wednesday announced increasing the basic customs duty on silver, both in dore and semi-manufactured form, to 10% in order to curb imports.

Currently, the basic customs duty on silver dore is 6.1%, while on silver unwrought or semi-manufactured items it is 7.5%.

In her Budget speech for the 2023-24 fiscal, Finance Minister Nirmala Sitharaman said customs duties on dore and bars of gold and platinum were increased earlier this fiscal.

“I now propose to increase the duties on articles made therefrom to enhance the duty differential. I also propose to increase the import duty on silver dore, bars and articles to align them with that on gold and platinum,” she said.

The basic customs duty on both silver dore and semi-manufactured items will be increased to 10%, as per the Budget document.

To encourage lab-grown diamonds, the government has scrapped the basic customs duty from the current 5%.

Commenting on the announcement, Founder and Managing Director of Kama Jewelry Colin Shah said that the hike in basic customs duty on articles made from gold bars and import duty on silver will lead to a rise in the final price of locally made jewellery and maybe challenging for local refineries.

He is also the former chairman of the Gem and Jewellery Export Promotion Council.

Echoing similar views, Malabar Gold and Diamonds Chairman M.P. Ahammed said the increase in the duty for silver is expected to push up the price.

Senco Gold & Diamonds Managing Director and CEO Suvankar Sen opined that it may have “some negligible impact” on silver utensils and jewellery industry, while Kalyan Jewellers Executive Director Ramesh Kalyanaraman said it will have no impact as its primary focus is on gold, diamond and other precious stone studded jewellery.

Khanna Gems Chairman Pankaj Khanna said gold, silver and diamond will get more expensive and will prove to be detrimental for the sector as a whole.

Currently, India is the world’s third-largest silver physical investment market after the U.S. and Germany. The country’s silver imports touched a record high of 8,000 tonnes in 2022 on rise in jewellery consumption, as per the market data.