The government raised import duties on gold and silver to 15% from 6%, aiming to curb imports and ease pressure on the current account deficit amid rising crude oil prices and external sector stress.
Experts said the policy is likely to push domestic prices higher, soften jewellery demand, and accelerate a gradual shift in investment behaviour across asset classes.
Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited, President of India Bullion and Jewellers Association Limited, and Chairman of Jain International Trade Organisation, said higher duties are likely to weigh on jewellery demand and jewellery-linked stocks, especially at already elevated price levels.
He added that demand for gold coins and ETFs may moderate if prices continue rising, noting that higher import duties could also revive smuggling risks, which had eased after earlier tariff reductions.
Vishal Trehan, Chief Operating Officer and India Sales Head (Institutional Broking & Clearing) at Aikyam Capital Group, said India’s trade deficit remains highly sensitive to crude oil and gold imports, adding that the duty hike is a strategic macroeconomic measure aimed at reducing non-essential imports.
He said higher duties could encourage households to shift savings toward financial assets such as mutual funds, bonds, equities and exchange-traded funds, supporting the long-term financialisation of savings and strengthening domestic capital markets.
Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities Limited, said domestic gold pricing is now driven mainly by global bullion trends, dollar/rupee movement and import parity adjustments, while the duty has already been absorbed into pricing.
He added that structural drivers such as de-dollarisation, central bank buying and currency hedging remain supportive for the long-term gold and silver outlook.
On consumer behaviour, jewellers expect a gradual shift toward lighter jewellery, lower-carat designs and higher gold exchange activity to offset rising costs.
Balaji Rao Mudili, Research Analyst at Bonanza Portfolio, said the duty hike comes on top of already elevated gold prices, adding that households may shift toward lighter-weight and studded jewellery or recycle old gold rather than postpone purchases.
He noted that demand may fall in volume terms but remain resilient in value terms due to higher prices, while smuggling risks could rise again.
Sachin Sawrikar, Founder and Managing Partner of Artha Bharat Investment Managers, said steep duty hikes may encourage informal channels, as India’s demand for gold is structurally driven by cultural and savings behaviour.
He said long-term solutions lie in deeper gold monetisation schemes and the development of liquid gold-backed financial products rather than relying on import restrictions alone.
Sumit Singhania, Research Head at Bajaj Broking, said higher duties may reduce imports, support the rupee and help narrow the trade deficit, but warned of pressure on jewellery companies due to weaker discretionary demand.
Rajeev Sharan, Head of Research at Brickwork Ratings India, said the increase in import duty on gold from 6% to 15% is likely to tighten domestic supply and push retail prices higher, which may soften discretionary demand in the near term.
He added that higher import costs, including basic customs duty and AIDC, have raised breakeven levels for jewellers, lifting MCX futures and domestic premiums while slowing import flows.
Sharan noted that the move aligns with the government’s broader effort to conserve foreign exchange, reinforced by the Prime Minister’s appeal to reduce gold purchases for a year.
He added that gold financing companies could benefit from higher collateral values following the price spike.
Ruchit Thakur, Market Analyst at VT Markets, said the sharp rise in import duties has significantly increased the landed cost of gold and silver, leading to an immediate uptick in domestic bullion prices on MCX.
He added that India’s heavy reliance on imports means domestic prices typically adjust quickly, with jewellers passing on higher costs to consumers and widening the gap between domestic and global prices.
Experts said the near-term outlook remains volatile as markets adjust to new import parity levels, even as long-term demand drivers for gold and silver remain intact.
