Wedding or engagement tradition dictated the bride’s parents give the groom a watch and the groom’s parents gift the bride a pearl necklace. Today the gift doesn’t have to be a watch or necklace, or you can skip this tradition altogether.
While not as popular as it once was, I think it’s a nice idea -- as a kind of welcome to the family - to gift something special to the bride/groom from the parents. These types of gifts are sentimental and can become family heirlooms.
Remembering that it’s the thought that counts, if your parents are thinking of giving their future son/daughter-in-law an engagement present make sure it’s something that he/she will cherish. It can be something which can be worn at the wedding (jewelry, watch, cufflinks) or an item he or she will truly appreciate. If possible, have it monogrammed or engraved to note the occasion.
Just like many wedding traditions you can tweak it to make it what you want it to be or forget it altogether. I wouldn’t tell anyone that they have to give a gift. A gift is something they should want to give and can afford to give.