Jewellers in India are in the middle of a three-day strike against a two per cent excise duty on branded jewellery proposed in the budget.

Thousands of shops and markets shut across the country on March 3rd and jewellers have threatened to continue the industrial action indefinitely.

"Jewellers in Delhi, Haryana, Punjab and Jammu and Kashmir have gone on a strike against the government's decision that would impact around 150,000 jewellers and 15 million artisans around the country," said Rakesh Saraf, general secretary of the Karol Bagh Jewellers Association.

"The decision is expected to affect not just the big players but also the small artisans who put a logo to mark their wares. Categorising these products as branded is unfortunate."

Jewellers claim the excise duty will hit both exports and the emergence of branded products in the domestic gems and jewellery market, New Kerala reports. Industry experts have warned that the tax burden will be passed onto customers.

"At a time when India is trying to establish itself as one of the leading branded jewellery makers in the world, this step comes as a major setback," said Bakul Mehta, chairman of the Gems and Jewellery Export Promotion Council, in Mumbai.

During the last calendar year, total exports of the Indian gems and jewellery sector were $14.33 billion, up around 38 per cent from the previous year.

Platinum has played an increasingly important role in that development, with Tanishq - a major Indian jewellery store - recently reporting that it has recorded strong profits on the back of improving platinum sales.

One of the key tenets of this success was the performance of platinum and diamonds, as general manager V Govind Raj told Business Standard.

"The demand for branded diamond jewellery is growing at a much faster rate compared with gold jewellery. The demand for branded platinum jewellery is also increasing. We have got good response from customers all these years, and we are confident it would get better in coming years," he explained.

Demand for platinum jewellery in India has been on an upward curve in recent years, with Platinum Guild International reporting a twofold increase in 2003 as it hit 600 kgs in 2003.