JB Insights
Case for customs duty hike on gold
G. CHANDRASHEKHAR, Advisor, ERTF
In July 2024, the government sharply reduced the total customs duty on gold import from a high of 15% to 6% (comprising 5% basic customs duty and 1% agri infra development cess) providing a major boost to import of the yellow metal.
The precious metals trade hailed the move as a major reform, although there was no official justification for the duty reduction that involved huge revenue sacrifice.
That gold is a demerit commodity is well recognized. India spends enormous amounts of precious foreign exchange every year to import gold. From 678.3 tons worth US$ 35 Billion in 2022-23, imports surged to 748.3 tons valued at $ 42.6 Billion the following year, and then on to set a new record of $ 58 Billion (757 tons) in 2024-25, the result of duty reduction.
In the first six months of 2025-26, gold import totaled 300 tons worth $ 26.5 Billion.
Interestingly, and in a way shockingly, India’s gold imports in October 2025 surged to $ 14.7 billion, nearly tripling from $ 4.9 billion in October 2024.
It was said to be driven by high festive season demand amid record global prices. This massive spike (165 tons) contributed to a record monthly merchandise trade deficit of $ 41.7 billion and put considerable pressure on the Rupee.
Anecdotal reports suggest a contraction in physical demand for gold for jewelry. Weak demand has forced many jewelers to sell gold ornaments at a discount to current prices. The obvious demand destruction follows rising gold prices in the global market and a rapidly depreciating Rupee that makes import more expensive.
One estimate suggests approximately 30% of gold demand is for jewelry and related items while as much as 70% is ‘investment’ demand, a euphemism for speculative investment. In other words, the average middle-class families that buy gold jewelry have suffered because of high prices, while ‘investors’ have benefited by treating gold as a financial instrument.
The government must feel concerned about the ballooning trade deficit and currency depreciation contributed by massive import of less-essential goods like gold.
In the upcoming Union Budget 2026-27, it is imperative for the Finance Minister to consider strategies to contain the expanding trade deficit, stabilize the currency, and focus on Debt to GDP.
One way to achieve these multiple objectives would be to restore status quo ante as far as gold import duty is concerned. Hiking import duty on gold back to 15% would be an easy win for the government. It will help fill the coffers with additional revenue for the exchequer. As a major importer of gold, India must use its import power.
Of course, there would be opposition to the duty hike. One favourite argument is that higher duty would encourage smuggling. This is a specious argument because our border control, surveillance and anti-smuggling initiatives are far more modern and technology-driven than they were a few decades ago. ‘Smuggling’ is a bogey the trade raises often. Those who claim smuggling must be asked to prove it.
JB Insights
US Holiday Sales Will See 5.5% Growth For 2026 : Mastercard Economics Institute
This Resilience Reflects A Robust Labor Market, Rising Household Wealth, and Broad-Based Consumer Demand Across Income Cohorts. Overall, The 2026 Holiday Season Showcases An Adaptable U.S. Consumer Using Digital and AI Tools To Maximize Value While Continuing To Drive Broader Economic Momentum.
The Mastercard Economics Institute (MEI) forecasts a strong 2026 U.S. holiday shopping season (November 1–December 24), projecting retail sales excluding gas and autos to grow 5.5% year-over-year (YoY). This resilience reflects a robust labor market, rising household wealth, and broad-based consumer demand across income cohorts.
Key Drivers and Growth Channels
- Channel Performance: E-commerce continues to lead with an expected 11% YoY growth, but in-store sales are set to grow 3.6%—their strongest pace since 2022. This highlights the critical role of omnichannel strategies.
- Inflation Dynamics: Inflation accounts for 2.8 percentage points of the total 5.5% growth. Unlike last year’s tariff pressures, current price increases are driven by elevated energy/diesel costs and the massive AI infrastructure buildout.
- Calendar Shifts: A late Thanksgiving compresses the shopping window, pushing retailers toward early promotions. Additionally, Cyber Monday falling in November will shift significant online volume into the month.
The Role of Artificial Intelligence
AI is reshaping both prices and consumer behavior:
- Tech Inflation: High demand for memory chips and data infrastructure components has driven a 12.2% YoY increase in prices for info-processing equipment. Consequently, the consumer electronics category is projected to post outsized nominal sales growth (+10.7% YoY).
- AI Power Users: Consumers with paid AI subscriptions demonstrate distinct “optimization” habits. Data shows these users plan early, shop across a wider variety of boutique and specialty merchants, and aggressively target promotions during Thanksgiving weekend before transitioning to experience and hospitality spending in December.
Last-Minute Shopping Behavior
The final rush to Christmas offers key operational insights for retailers:
- In-Person and Malls: The final week before Christmas sees heavy physical store foot traffic, especially in enclosed shopping malls where consumers can complete multi-category purchases. Climate also plays a role: warmer-state residents (e.g., Florida, Nevada) are far more likely to make last-minute in-store runs than those in colder states.
- Transaction Value Trends: Average order values for children’s items peak near Black Friday, while premium categories—such as jewelry, cosmetics, luxury handbags, and department stores—see transaction values climb steadily from December 15, peaking on Christmas Eve as procrastinating shoppers pay a premium for convenience.
AI tools lower search costs for consumers, making price transparency higher than ever. Retailers must capture early November demand through targeted promotions before comparison tools push shoppers toward alternative or boutique brands.
Last-minute shoppers are price-inelastic and seeking speed. Malls and physical stores should maximize inventory for high-margin, rush-gift items (jewelry, cosmetics, designer goods, gift cards) in the final 10 days, leveraging store availability over promotional discounting.
Overall, the 2026 holiday season showcases an adaptable U.S. consumer using digital and AI tools to maximize value while continuing to drive broader economic momentum.
-
National News14 hours agoGGJS 2026 Concludes With High-Volume Trade and Strategic Focus On Next-Gen Leadership
-
National News9 hours agoNemichand Bamalwa Creates Nav Avatar Necklace For Maa Durga At Indian Museum’s Durga Puja
-
National News9 hours agoKISNA Diamond and Gold Jewellery Rolls Out Nationwide ‘Shop Sparkle Win’ Campaign Across 218 Cities, With 823 Vehicles Up For Grabs
-
National News18 hours agoMCX Gold Silver Futures See Dip

