India’s gold jewellery market has witnessed a sharp slowdown after the government increased import duties on gold, with industry bodies reporting a decline of nearly 70% in consumer demand. The sudden drop comes as soaring gold prices and higher taxes have pushed jewellery costs to record levels, forcing many buyers to postpone purchases.
According to industry estimates, gold prices have surged significantly in recent months due to geopolitical tensions, global economic uncertainty, and strong international demand for safe-haven assets. The latest duty hike has further increased retail prices, making gold jewellery less affordable for consumers across the country.
Jewellers have reported a steep decline in footfall at retail outlets, with many customers opting to delay purchases in anticipation of price corrections. The impact has been particularly visible in smaller towns and rural markets, which traditionally account for a large share of India’s gold consumption.
Industry representatives said the demand slowdown has affected both daily sales and advance bookings for weddings and festive occasions. While consumers continue to view gold as a long-term investment and a symbol of wealth, many are now choosing lighter jewellery or exchanging old ornaments instead of making fresh purchases.
The rise in prices has also affected bullion traders and wholesalers. Market participants noted that inventory movement has slowed considerably, forcing businesses to reassess procurement strategies and stock levels. Several traders expressed concerns that prolonged weakness in demand could impact the broader jewellery ecosystem, including manufacturers, artisans, and retailers.
Despite the current slowdown, industry experts remain optimistic about long-term demand. India remains one of the world’s largest consumers of gold, and purchases traditionally pick up during wedding seasons, festivals, and periods of economic stability. However, analysts believe demand recovery will depend largely on price movements and any future changes in import duty policies.
The World Gold Council has previously noted that India’s gold demand is highly sensitive to price fluctuations. Sharp increases in prices often lead to temporary declines in jewellery purchases, while investment demand through coins, bars, and gold-backed financial products may continue to remain relatively resilient.
The industry has urged the government to review import duties, arguing that excessively high taxes not only reduce demand but can also encourage unofficial imports and smuggling. Trade bodies have called for a balanced policy framework that supports both revenue collection and the health of the domestic jewellery sector.
With gold prices remaining elevated and geopolitical uncertainties continuing to influence global markets, the Indian gold industry is closely monitoring developments that could determine the trajectory of demand in the coming months.
