Gold's Worth: Navigating India's High Import Duty Waters
The recent hike in import duties for gold and silver aims to conserve foreign exchange and promote domestic gold circulation. While volumes might dip temporarily, industry experts believe demand will sustain due to gold's cultural significance. Initiatives encouraging gold recycling and reuse are expected to maintain economic value.
The recent decision by the Indian government to hike import duties on gold and silver threatens to dampen jewellery volumes in the short term. However, experts suggest robust demand will persist because of gold's cultural and economic importance in India.
Pankaj Parekh, an industry veteran, explained that the duty increase, which pushes the total tax to 18.45%, is designed to conserve foreign reserves and encourage domestic recycling. Amid geopolitical tensions and fluctuating oil prices, Senco Gold & Diamonds CEO Suvankar Sen predicts the elevated duty could last a year.
Despite forecasted volume dips of up to 15%, Anjali Jewellers Director Annargha Uuttiya Chowdhuury expects limited consumer impact, noting gold's emotional and financial significance. Initiatives like Kalyan Jewellers' 'Nation First – Gold4India' aim to foster domestic gold recirculation, reflecting a broader push toward economic resilience and self-sufficiency.
(With inputs from agencies.)
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