- Import duty hike likely to increase gold prices for consumers.
- Discretionary buying may dip; wedding, festive demand expected to hold.
- Jewellers may promote lower caratage and exchange programs.
A hike in import duty on gold is expected to push up retail prices, making it harder for middle-class shoppers and first-time buyers to make purchases. Industry executives say discretionary buying is likely to take a hit in the short term, with some consumers choosing to wait for prices to stabilise before spending.
While a volume dip is anticipated in the near term, companies remain cautiously optimistic that demand tied to weddings and festive occasions will hold steady, given how deeply gold is woven into Indian culture and tradition.
How Are Jewellers Responding To The Import Duty Hike?
Industry leaders across major jewellery chains say the price sensitivity of buyers, especially those on tighter budgets, is a genuine concern. Most of India’s local gold consumption depends on imports, which is why any change in tariffs directly affects what consumers pay at the counter. India’s gold imports rose to $72 billion in FY26, up from $58 billion in FY25.
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“An increase in import duty on gold typically has a direct impact on retail prices, which can influence short-term consumer sentiment, especially for price-sensitive buyers. In the immediate phase, some customers may choose to postpone discretionary purchases or wait for price stability before making decisions. It can lead to a volume degrowth of 10-15%,” said Suvankar Sen, MD and CEO at Senco Gold.
MP Ahammad, chairman at Malabar Group, noted that first-time buyers will take a moment to recalibrate, and that exchanging old gold for new jewellery, which already accounts for a significant share of transactions at organised retailers, will become the dominant mode of purchase going forward.
Will Gold’s Cultural Value Keep Long-Term Demand Intact?
“Jewellers are likely to pass on the hike in import duty to consumers, pushing up prices of gold ornaments. However, India’s cultural and emotional affinity to gold, especially during weddings and festive seasons, continues to support long-term demand. Also, customers are increasingly viewing gold not only as an ornament but also as a trusted investment vehicle,” said Dr Joy Alukkas, chairman and MD at Joyalukkas.
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To ease the burden on buyers, several retailers are pushing exchange programmes that allow customers to swap old, unused, or broken jewellery for new pieces.
The Gem and Jewellery Export Promotion Council has also urged its members to promote lower caratage jewellery and reduce the push for gold bars and coins, which make up 20-30% of total imports.
