Jewellery stocks fall on gold duty hike

The Indian government’s decision to hike gold import duty to 15% has sent jewellery stocks tumbling, with Kalyan Jewellers and Senco Gold & Diamonds falling up to 6%.

Analysts have expressed concerns over the near-to-medium-term outlook for jewellery stocks, citing the potential impact of higher gold prices on demand.

Titan Company, Kalyan Jewellers, and Senco Gold & Diamonds are among the organised jewellery retailers that may be affected by the duty hike.

According to Chokkalingam G, founder and managing director of Equinomics Research, the hike in gold import duty is a “third major shock” for jewellery buyers, following the sharp rally in global gold prices and the depreciation of the Indian rupee.

Shares of Kalyan Jewellers, Senco Gold & Diamonds, and other jewellery companies fell as much as 11.3% intraday on the National Stock Exchange before settling mixed.

In contrast, shares of Manappuram Finance, Muthoot Finance, and IIFL Finance rose up to 7%.

The duty hike is expected to further increase domestic gold prices, which are already hovering near record highs, and potentially hurt jewellery demand.

Gold futures on the Multi Commodity Exchange of India rose more than 7% to hit an intraday high of ₹1,63,988 per 10 grams on Wednesday.

The Nifty 50 ended 0.14% higher, while the Nifty Metal index rose 3%.

Gold Import Duty Hike

The basic Customs duty on gold and silver imports has been increased from 4.35% to 10%, while the agriculture infrastructure and development cess has been raised to 5% from 1%.

This effectively takes the total import duty from 5% to 15%.

The new rules came into effect on May 13.

Gold imports accounted for 9-10% of India’s total import bill in 2025-26, with imports rising 24% year-on-year to $71.98 billion in the last financial year.

Analysts believe that the duty hike could squeeze volumes for jewellers, as higher prices may delay discretionary purchases.

Jewellery Demand

Demand for jewellery may lose its lustre due to the duty hike, according to analysts.

The Indian rupee has depreciated, making gold imports more expensive, and the duty hike will only add to the cost.

This may affect the sales of organised jewellery retailers, who are already facing competition from unorganised players.

The gold price has rallied around 7% in the past month but remains below its record high of around ₹1,93,000 seen in January this year.

In room 304 of the Multi Commodity Exchange of India, traders were seen closely watching the gold prices, as the duty hike was announced at 9:46 PM IST on May 13.

The duty hike is a significant development in the gold market, and its impact will be closely watched by analysts and investors.