JB Insights
WGC releases ‘India Gold Market – Reform and growth’
The World Gold Council (WGC) has published a new report titled ‘India Gold Market – Reform and growth’. The report explores the key factors that shape India’s gold demand and supply, as well as the challenges and opportunities for the future. The new report covers various aspects of India’s gold market, such as: The drivers of Indian gold demand, jewellery demand and trade, jewellery market structure, gold investment market and financialisation, bullion trade, gold refining and recycling, and gold mining in India.
In the report foreword, Juan Carlos Artigas, Global Head of Research, World Gold Council, said: “In 2017 we produced “India’s Gold Market – evolution and innovation’. A lot has changed since that report was published. This compendium of updated reports delves deeper into key factors that underpin India’s position as the second largest gold consumer in the world: it studies the drivers of gold demand and the perception of consumers; it examines the new investment landscape: and it considers the complex issue of gold supply.
“Few of the global events that have rocked societal and geopolitical stability could have been imagined when our 2017 report was published. That India has had to adapt is not surprising, but the rate at which change is happening in the country is, arguably, unprecedented.
“Despite – or perhaps because of – macroeconomic uncertainties, India’s population resolutely turns to gold. Weddings and festivals are key drivers of gold demand and the country is one of the world’s largest bar and coin markets. There is no doubt that gold retains prominence in the social and financial life of many Indians, both urban and rural.
“The years ahead will present challenges. But rather than thinking them onerous, we believe there is tremendous opportunity for gold. Regulation of India’s jewellery industry has already made huge strides in building consumer trusts. If new export markets can be developed, the current fragile platform – 90% of jewellery exports go to just five countries – will be diluted. More accessible banking offers a possibility to reach investors who have long understood gold’s safe-haven qualities but now find themselves negotiating a plethora of choice. And in the longer term, the Gold Monetisation Scheme, proposed legislative changes in the mining industry, and resolution of recycling traceability issues may reduce India’s reliance on imported gold.
“As we look ahead with optimism, the insights in this report will help us ensure that gold retains or even increases its relevance to India’s economy – generating further employment and continuing to play its roles as an adornment and an effective portfolio diversifier and hedge against inflation
JB Insights
India Raises Gold, Silver Import Duty To 15% To Curb Soaring Precious Metal Import Bills and Conserve Forex
Higher Duties Could Increase Prices, Impact Exports, and Create Liquidity Pressure For MSME Manufacturers Due To Rising Working Capital Requirements
#JbExclusive
The Finance Ministry on Wednesday raised effective import duty on gold and silver from 6% to 15% — comprising 10% basic customs duty and 5% agriculture infrastructure and development cess (AIDC) — effective 13 May 2026. The move aims to curb soaring precious metal import bills and conserve foreign exchange reserves as the West Asia crisis intensifies pressure on India’s trade balance.
Markets reacted swiftly. Titan fell as much as 1.5% on the day, extending a prior two-session decline of over 10%, while Kalyan Jewellers dropped as much as 5.9%. Gold and silver ETFs rallied sharply on expectations of higher domestic bullion prices. WGC data implies the 9-percentage-point hike could suppress annual consumer demand by roughly 57 tonnes — based on an estimate of 6.4 tonnes of demand suppression per 1% duty rise.
● Industry Voices
“Higher duties could revive gold smuggling, which had eased substantially after the 2024 duty reduction. Every 1% rise in import duty reduces consumer demand by approximately 6.4 tonnes — implying the hike could suppress demand by ~57 tonnes annually.”
Prithviraj Kothari, MD, RiddiSiddhi Bullions | National President, IBJA Bullions | Chairman, JITO
“Higher duties could increase prices, impact exports, and create liquidity pressure for MSME manufacturers due to rising working capital requirements. We urge continued dialogue for balanced solutions that support both economic goals and export growth.”
Kirit Bhansali Chairman, GJEPC
“The increase in customs duty is a temporary and calibrated measure in the present economic scenario. The trade should remain calm and confident — India’s jewellery sector has always demonstrated resilience and adaptability during challenging times.”
Rajesh Rokde Chairman, GJC
“It is important for the trade fraternity to avoid panic and continue business with confidence and responsibility. GJC fully supports the nation’s larger economic priorities and remains committed to constructive engagement with policymakers.”
Avinash Gupta Vice Chairman, GJC
“Due to the simultaneous occurrence of two events—the sudden 9% hike in import duty and statements made by PM Modi—both the jewelry industry and customers find themselves in a state of confusion. This is significantly impacting jewellers, artisans, and large factories alike.
My suggestion to everyone is to remain patient and avoid panicking. Everyone should avoid protests, shop closures, or any form of aggression. Once the government’s complete process is revealed, we can then consider all options through dialogue and discussion.”
Anurag Rastogi, North India Head – IBJA
“Business is already at nearly 50% of normal levels, and the duty increase will reduce consumption volumes further. Promoting lower caratage jewellery — 9ct, 14ct, 18ct — could make products more affordable and reduce gold usage. As an industry, we must stand with the government during this period.”
K. Srinivasan, CMD, Emerald Group
“An increase in import duty on gold typically has a direct impact on retail prices, influencing short-term consumer sentiment — especially for price-sensitive buyers. In the immediate phase, some customers may postpone discretionary purchases or wait for price stability. It can lead to a 10–15% volume decline to help control gold inflows into the country.
However, gold buying in India is deeply linked to weddings, festivals, and long-term wealth preservation, so demand is usually resilient over time.”
Suvankar Sen, MD & CEO, Senco Gold and Diamonds
“Changes in import duties on gold and silver are part of an evolving policy landscape, and the industry has consistently adapted with resilience and stability. We respect the government’s decision and recognize the broader economic considerations behind such measures.
Over the years, gold import duty has moved from 15% to 6% and now back to 15%. However, gold prices have never been driven by changes in duty alone. Global trends, rupee depreciation, and consumer demand remain key factors, while recent revisions reflect an already elevated domestic gold price environment.”
Chetan Thadeshwar, CMD – Shringar House Of Mangalsutra Ltd
“At SwarnShilp, we believe any duty increase is a reminder for the industry to become faster, more efficient, and more design-driven. Our focus remains on strong inventory planning, lightweight innovation, and timely delivery to support our customers despite market volatility.”
Khushboo Ranawat, Director – SwarnShilp Chains & Jewellers Pvt Ltd
● Industry Proposals
Lower caratage push
Promote 9K, 14K & 18K jewellery to cut gold consumption and keep prices within reach
Revamp GMS
Overhaul the Gold Monetization Scheme through jeweller networks to mobilize idle household gold
Old Gold Exchange
Scale consumer recycling programmes to reduce dependency on fresh bullion imports
● Risks to watch out for
● Dubai/CEPA arbitrage — GTRI warns that the India–UAE CEPA could make UAE-routed imports cheaper, partially neutralizing the duty’s intent
● Smuggling revival — duty spikes above 10% have historically correlated with the resurgence of grey-market gold flows into India
● Export competitiveness — higher landed costs raise working capital requirements for MSME exporters and could weigh on jewellery export volumes
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