India gold demand fell 6% in Q2 as import-duty hike squeezed jewellery buying
India’s jewellery demand dropped 15% year-on-year to 75 tonnes in April–June, with higher duties and elevated prices pushing shoppers toward exchanges. Some jewellers said exchange purchases accounted for up to 70% of sales as grey-market inflows pressured organised retail.
What happened
World Gold Council · India’s gold demand fell 6% in Q2 as higher import duty, subdued seasonal buying and high prices cut jewellery demand 15%. Grey-market
Key facts
- India gold demand: 131.4 tonnes, down 6% year-on-year in April-June quarter
- Jewellery demand: 75 tonnes, down 15% year-on-year
- India share of global gold jewellery demand: 27%
- Import-duty hike: 9%; total duty plus GST differential: 18%
- Gold seizures: 160.91 kg between May 13-June 30 versus 86.16 kg between April 1-May 12
- Jewellers reported exchange volumes up 10-20%; exchange purchases represented up to 70% of sales
- Investment demand: 54 tonnes in Q2 versus 100-tonne average in preceding three quarters
- Gold ETF demand: 4 tonnes in Q2, down 80% from 20 tonnes in Q1
- Gold supply: 120 tonnes, lowest in six years
- Net gold imports: 98.1 tonnes, down 23%
- Net recycling: 19 tonnes, down 17% year-on-year
Why this matters
The duty-driven shift toward exchanges and pressure on smaller retailers could create acquisition, franchise and supply-chain partnership opportunities for compliant organised chains.
What to watch
- Any change in India’s gold import duty, GST treatment or customs enforcement intensity.
- Gold prices in rupees and the rupee-dollar exchange rate, which determine the consumer ticket price.
- Festive-season and wedding-season sales mix: exchange transactions versus new cash purchases.
- Reported organised-jeweller same-store sales, volume growth, inventory days and gross-margin commentary.
- Official imports, recycled-gold supply and indicators of smuggling or grey-market price discounts.
- Expansion of lightweight-product assortments, buyback offers and store-led exchange campaigns.
- Organised jewellers are likely to expand exchange, recycling, old-gold buyback and purity-testing promotions ahead of the festive and wedding seasons.
- Retailers may push lightweight, lower-ticket and studded jewellery to preserve unit sales despite high gold prices.
- Chains may reduce fresh-gold inventory exposure, rely more on recycled gold and tighten hedging to protect margins and working capital.
- Industry groups are likely to increase lobbying for lower import duties and stronger anti-smuggling enforcement.
- Large branded players may use trust, hallmarking and exchange-rate transparency to capture customers migrating away from unorganised sellers.