Prithviraj Kothari, managing director at RiddiSiddhi Bullions Ltd. and president of the India Bullion and Jewellers Association Ltd., said the Union Budget 2026–27 left the bullion industry without the import duty cut and the GST changes it had sought, even as the government moved to narrow a capital gains exemption linked to sovereign gold bonds.
Kothari said the sector had expected a lower import duty on gold, GST rationalisation, export incentives and extended credit support. He said the Budget instead announced a capital gains tax exemption on RBI sovereign gold bonds that will apply only to original subscribers, not to those who buy in the secondary market.
Finance minister Nirmala Sitharaman's speech includes a proposal that limits the capital gains exemption on sovereign gold bonds to bonds subscribed at original issue and held until redemption on maturity.
The minister's speech also anchors the Budget in fiscal consolidation, a gradual fall in the Centre's debt ratio, and higher public capital spending for 2026–27.
Policy frame
Kothari said the Budget focused on sustained 7% growth through fiscal discipline, structural reforms and development measures. Sitharaman told Parliament India has delivered “a high growth rate of around 7%” in recent years, and she framed the Budget against global supply-chain disruption and a push for stable long-term investment.
The minister set out fiscal consolidation as a core theme in the speech. She said the fiscal deficit acts as a main operating instrument for debt targeting, and she placed the deficit at 4.3% of GDP for BE 2026–27, down from 4.4% in RE 2025–26.
She also stated the Centre's debt-to-GDP ratio at 55.6% in BE 2026–27, compared with 56.1% in RE 2025–26, and reiterated the earlier stated aim of 50±1% by 2030–31.
The speech keeps public investment central to the government's growth plan. Sitharaman proposed Rs 12.2 lakh crore in public capex for 2026–27, up from Rs 11.2 lakh crore in BE 2025–26.
SGB rule
Kothari highlighted the sovereign gold bond change as the Budget's key announced step for gold-linked investments. He said the Budget announced “capital gains tax exemption on RBI Sovereign Gold Bonds, applicable only to original subscribers, not to secondary market buyers”
The speech contains a matching limitation. It states that the capital gains exemption on sovereign gold bonds will apply only when an individual subscribes at the time of original issue and holds the bond continuously until redemption on maturity.
The speech also states the government will apply the exemption uniformly to all issuances of sovereign gold bonds by the Reserve Bank of India.
The minister placed this proposal among other direct tax measures, including changes to buyback taxation and securities transaction tax rates in derivatives.
Duty asks
Kothari said the bullion industry had expected a cut in import duty on gold, GST rationalisation, export incentives and extended credit support. He said the Budget did not announce “any meaningful reduction in gold import duty or GST reforms”.
Sitharaman's Budget speech section that lists indirect tax measures focuses on customs and excise proposals across areas such as export inputs, energy transition items, civil aviation parts, personal imports and a one-time SEZ measure. The text provided in the speech does not mention a reduction in gold import duty.
The annexure portion included with the Budget 2026–27 text lists customs duty rate changes across categories such as critical minerals, renewable energy, nuclear energy, electronics, civil aviation, defence sector, drugs and personal imports. It does not list a gold import duty cut in the extract provided.
On GST, the annexure lists proposed GST law amendments on topics such as post-sale discounts, provisional refunds for inverted duty structure, and place of supply for intermediary services. It does not set out a GST rate change for gold in the extract provided.
Sector read
Kothari described the Budget's broader direction as prioritising manufacturing, MSMEs, services, infrastructure and energy security, alongside trust-based governance and ease of doing business. The minister's speech sets out manufacturing proposals across sectors such as biopharma, semiconductors, electronics components, rare earth corridors, chemical parks and capital goods capability.
The speech also proposes MSME measures that include a Rs 10,000 crore SME Growth Fund, a Rs 2,000 crore top-up for the Self-Reliant India Fund, and changes to how MSMEs use receivables financing through TReDS.
For infrastructure and financing, the minister proposed an Infrastructure Risk Guarantee Fund and steps linked to REITs for CPSE real estate assets, while also listing freight corridors, national waterways and a coastal cargo promotion scheme.
Kothari's reaction separates those broad policy themes from what the bullion trade wanted from the Budget. He said the sector looked for gold duty relief and GST changes, and he pointed to the sovereign gold bond capital gains rule as the main gold-linked tax update in the speech.
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