Gold demand crashes 70% in India fortnight after duty hike to 15%
Volumes collapsed to 7.5 tonnes from 25 tonnes after import duty jumped to 15% from 6%, lifting effective tax to 18.45%. Joyalukkas reports 35% demand drop; Bhima sees shift to lighter pieces and old-gold exchanges. Bar/coin demand still rose 34% to 62.3 tonnes in Q1 as investors front-ran the hike.
What happened
India Bullion and Jewellers Association (IBJA) · Gold demand in India crashed 70% to 7.5 tonnes in the fortnight after the government hiked import duty to 15%
Key facts
- 70% demand drop
- 7.5 tonnes vs 25 tonnes
- import duty 15% from 6%
- tax burden 18.45% from 9.18%
- Joyalukkas demand -35%
- bar/coin demand +34% to 62.3 tonnes Q1
- annual consumption 800-850 tonnes
- gold ₹1.57 lakh per 10g
Why this matters
Distressed regional jewellers facing margin compression at 18.45% effective tax create a 6-12 month window for consolidation plays at depressed multiples.