Gold shop owner sits outside his empty shop in a quiet Indian market street.
Demand for gold in India has plummeted by approximately 70% in the fortnight ending May 27, according to industry estimates. This sharp decline follows the government’s decision to increase the import duty on gold to 15% from the previous 6%, effective May 13. In the specified fortnight, demand is estimated to have fallen to around 7.5 tonnes, a significant drop from the roughly 25 tonnes recorded during the same period last year.
The substantial hike in import duty is seen as the primary driver behind the reduced consumer and industry interest in gold. This policy change by the Indian government is likely to impact gold trading volumes and could have broader implications for the precious metals market, both domestically and internationally, given India’s significant role as a major gold consumer.
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