Kalyan Jewellers, PC Jeweller to Rajesh Exports: Jewellery stocks rise ahead of Nirmala Sitharaman’s budget speech

Jewellery stocks saw a strong uptick in today's trade on February 1, with shares of Kalyan Jewellers, PC Jeweller, and Rajesh Exports rising between 2% and 5% ahead of Finance Minister Nirmala Sitharaman's Union Budget speech.

Other jewellery stocks, such as Motisons Jewellers, Senco Gold, and Thangamayil Jewellery, were also trading with gains of up to 6% as of 10:45 a.m. today.

The demand for jewellery has strengthened after the gold import duty cut in the Union Budget 2024. Therefore, in the first full budget of NDA 3.0, the jewellery industry expects policy continuity to boost consumer demand for jewellery.

India's gold demand has been on a remarkable upward trajectory in recent years, further boosted by the customs duty cut and heightened festive buying, as well as the central bank's continued gold purchases.

The global shift from risky assets to safe-haven assets is also supporting gold prices. India, the world's second-largest gold consumer after China, heavily depends on imports to meet its jewellery industry needs.

India’s gems and jewellery industry is poised for a historic year in 2025, with sales projected to reach an impressive USD 100 billion, according to the All India Gem and Jewellery Domestic Council (GJC).

Union Budget 2025: Expectations for the gold industry

Mr Mahendra Luniya, Digital Gold Expert and Chairman of Vighnaharta Gold, emphasizes that the gold industry has been a cornerstone of India's economy, yet it continues to operate without stringent regulatory frameworks. He believes this year’s Union Budget should address the pressing need for robust regulations, especially for digital gold.

According to him, mandating gold buyers to declare gold as an asset in their balance sheets would not only ensure transparency but also streamline tax compliance, making the market more inclusive and accessible.

Luniya points out that such declarations could help bring gold transactions to the forefront, paving the way for smoother buy-sell processes while fostering trust and accountability within the sector. He also stresses the importance of regulatory measures requiring gold jewellers to maintain and disclose purchase records, which would enhance traceability and further formalize the gold market.

"Lastly, an initiative to bring idle gold back into the market can significantly boost liquidity, helping businesses flourish while creating employment opportunities. This step aligns with the vision of 'Sankalp of Viksit Bharat,' driving economic growth and strengthening the gold sector’s contribution to India's economy," said Mahendra Luniya.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.