"The strike has been called off today onwards. We will be starting our shops from tomorrow," said Kumar Jain, vice chairman of the Mumbai Jewellers Association.

The wedding season is at its peak in India, with Akshaya Tritiya, one of the biggest gold buying festivals later in the month, making the period crucial for jewellers.

Jain said the strike would resume on May 11 if the tax rollback does not materialize.

The strike was staged to protest against an excise levy on unbranded jewelry of 0.3 percent, and a tax collected at source on transactions worth more than 200,000 rupees ($3,900). The annual budget also doubled import duty on gold to 4 percent.

The moves were game-changers for the $200 billion a year jewelry industry and experts had predicted they could cut gold imports by a third to 655 metric tonnes in 2012, allowing China to overtake India as the biggest gold importer.

The strike by jewellers resulted in a loss of 200 billion rupees ($3.92 billion), according to industry officials.

($1 = 51.0750 Indian rupees)

(Reporting by Anurag Kotoky and Siddesh Mayenkar; Editing by Nick Macfie)

• A Permanent Economic Emergency