The government could consider lowering the import duty on gold — 15 per cent at present — in the budget to boost shipment amidst a slowdown in demand in the US and Europe and a forecast of recession in the western world.

Gems and jewellery exports to the US fell 36 per cent and both to the UAE and Europe by 26 per cent in November compared with the previous month, data released by the commerce ministry showed.

While exporters see a rebound on the back of Christmas and New Year’s sales, industry figures said recessionary conditions next year may pose further challenges.

While the commerce ministry has backed the industry demand to reduce the import duty in the budget with a view to push exports and the manufacture of gems and jewellery, sources said the finance ministry would try to balance out the demands of the industry and the current account deficit.

Gems and jewellery exports fell 27 per cent to $2.5 billion in November from $3.46 billion in October.

It grew 2 per cent in the April-November period from a year earlier.

Hike roster

The government is also considering increasing the duty on non-essential items to boost domestic production and cut down the current account deficit.

Customs duty hikes are being considered on private jets, helicopters, high-end electronic items, plastic goods, jewellery, high-gloss paper and vitamins, sources said.

The government is looking at items which have sufficient production capacity and allow for higher import substitution.

Finance minister Nirmala Sitharaman had slapped higher duties on items of daily use such as umbrellas, headphones, earphones, loudspeakers, smart meters and imitation jewellery.

Most of these items were being imported from China.