Gold demand in India has fallen sharply after the government increased the import duty on gold. According to industry estimates, gold demand dropped to just 7.5 tonnes during the two weeks ending May 27, compared to around 25 tonnes during the same period last year.
On May 13, the government increased the import duty on gold from 6% to 15% to reduce gold imports.
The unorganised sector, which accounts for about 65% of the gold trade, has been the most affected.
10g of 24k gold (99.9%) in Delhi, India is 1,60,535.00 Indian Rupee. In Mumbai, it’s Rs.1,61,040.00.
India’s annual gold consumption is estimated at 800 to 850 tonnes. On Friday, 999-purity gold was trading at ₹1.57 lakh per 10 grams in Mumbai’s spot market, excluding GST.
Experts say that the fall in gold demand is not only due to the duty hike alone. Prime Minister Narendra Modi’s appeal to avoid buying gold for a year has also influenced buyers. According to him, gold demand at Joyalukkas has fallen by more than 35%.
Mehta said rising prices of petrol, diesel, and essential food items have also reduced people’s purchasing power. As a result, many consumers are postponing gold purchases.
After the increase in import duty, the effective tax on gold has risen from 9.18% to 18.45%, including GST.
Industry experts also pointed out that the ongoing Adhik Maas period has affected gold sales. Traditionally, many people avoid purchasing gold and other precious items during this period.
Jewellers said gold demand was strong during the first quarter of the year but is expected to weaken in the second quarter. During the March quarter, demand for gold bars and coins in India increased by 34% year-on-year to 62.3 tonnes.
According to the India Bullion & Jewellers Association (IBJA), retail demand dropped to roughly 7.5 tonnes in the last two weeks of May, down from 25 tonnes during the same period in 2025.
