From May 13, the government raised the import duty on gold and silver to 15% from 6%. The new duty structure includes a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC).
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For millions of Indians who hold physical gold, Jain says there is an immediate upside to the duty hike. “Overnight, the value of gold has gone up 10% so people who’ve been sitting on gold, from a financial perspective, their underlying asset value has certainly gone up,” he said.
Jain sees this as a catalyst. He believes gold’s role in portfolio diversification will become more data-driven and deliberate as investors process the new price reality.
The World Gold Council will be publishing research on what the shift means for consumers — urban, rural, jewellery buyers, and financial investors alike.
Read Here | Gold and silver duty hike explained: What it means for buyers, jewellers and the economy
On the domestic jewellery market, Jain says the timing of the duty hike offers some cushion. May through August is traditionally the slow season for jewellery buying in India, which means the industry avoids the worst-case scenario of a demand shock during the festive period.
Jain expects consumers — as they have historically — to wait, watch, and gradually adjust to the new price level before the festive buying season kicks in.
Jain is not without worry, however. He flags the risk of a resurgence in grey market activity as his top concern. He points to what happened in 2024, when the Finance Minister reduced gold import duties in a Budget announcement — and the parallel economy for gold nearly froze overnight.
Now, with gold prices higher than they were then and a 15% duty adding a large gap between official and unofficial prices, Jain believes the arbitrage opportunity is significant enough to fuel illicit trade if the government does not act proactively.
Jain said earlier gold monetisation schemes saw limited success as household gold is difficult to bring into the formal system. He believes future policies from 2026 should take a fresh, technology-led approach, keeping in mind how Gen Z and millennials interact with gold.
Digital tools such as lockers and asset tracking, he said, could help improve gold recycling and monetisation while unlocking economic value for the country.
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