Gold prices witnessed a sharp increase of Rs 10,000 per 10 grams overnight in Hyderabad and across major cities in India. The sudden surge came after the central government announced a significant hike in import duty on gold and silver. The decision has sent shockwaves through the jewellery market and left consumers and traders scrambling to understand the impact on their purchases and businesses.
The Government of India has raised the import duty on gold and silver to 15 percent from the previous rate of 6 percent. This substantial increase in customs duty is expected to make gold imports more expensive and directly impact retail prices across the country. The move is part of the government’s broader economic strategy to manage the current account deficit and reduce dependency on gold imports, which constitute a significant portion of India’s import bill.
In an unprecedented appeal, Prime Minister Narendra Modi has urged citizens to refrain from purchasing gold for one year. The Prime Minister’s request is aimed at reducing the country’s gold import burden and encouraging citizens to invest in alternative financial instruments. India is one of the largest consumers of gold globally, with demand traditionally spiking during wedding seasons and festivals. The government’s dual approach of increasing duties and public appeals indicates the seriousness of addressing gold import concerns.
Jewellers in Hyderabad reported a mixed response from customers, with some rushing to make purchases before further price increases while others adopted a wait-and-watch approach. The All India Gems and Jewellery Domestic Council has expressed concerns that the steep duty hike could impact the organized jewellery sector and potentially boost smuggling activities. Market experts suggest that the 15 percent import duty is among the highest in recent years and will significantly affect gold trading patterns in the coming months.
