Gold Demand Drops 70% After Duty Hike
Gold demand in India has fallen sharply after the recent import duty hike, with buyers staying cautious despite a correction in prices. Industry estimates suggest many households are choosing to sell old jewellery instead of making fresh purchases.
India Gold Demand Drops After Duty Hike
Gold demand in the Indian market has dropped by more than 70% after the customs duty on gold was raised from 6% to 15%, according to India Bullion and Jewellers Association Secretary Surendra Mehta.
The duty hike, effective from May 13, has made fresh purchases costlier and weakened retail sentiment. Buyers who were already cautious due to high prices have largely stayed away from the market, especially in the jewellery segment.
Households Sell Old Gold Jewellery
The fall in demand has coincided with a rise in the sale of old gold jewellery. Many households are selling existing gold holdings as prices remain high compared to last year, even after the recent correction.
Industry estimates suggest old gold sales during the April-June 2026 quarter could be close to 50 tonnes. This reflects a shift in consumer behaviour, with people choosing to monetise gold instead of adding new jewellery or investment holdings.
Gold Price Correction Hits Sentiment
Gold prices have corrected significantly from their January 2026 highs. After crossing ₹1.80 lakh per 10 grams earlier this year, prices moved closer to ₹1.40 lakh per 10 grams by the end of June.
The recent decline has created uncertainty among buyers and investors, with some waiting for further correction before entering the market. Analysts say the outlook will depend on global interest rates, geopolitical risks, import duty policy and domestic festival demand.
