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Gold and silver prices in India fell sharply following a proposal to cut import duty from 15% to 6%. This move is expected to boost domestic demand for jewellery and increase imports while reducing smuggling incentives. Jewellery stocks rose significantly.
All eyes remain on Senco Gold, Titan, Kalyan Jewellers share price along with other jewellery stocks as gold and silver prices in the domestic market experienced a significant drop. This was followed by the Finance Minister’s proposal to cut import duty on these precious metals from 15% to 6%.
In Mumbai's bullion market, gold was trading at ₹69,100 per 10 grams, marking a decline of nearly ₹4,000, or about 5%, from Monday’s price of ₹72,750. Similarly, silver prices fell to ₹85,400 per kg from ₹88,300, representing a drop of approximately ₹3,000, or 3%. This decrease was also reflected in the MCX (Multi Commodity Exchange) trading platform.
The proposed reduction in import duty is expected to make importing gold and silver cheaper, potentially increasing supply and leading to further price reductions. This is likely to result in higher domestic demand for jewellery. Moreover, the lower duty is anticipated to decrease the incentive for smuggling these metals into the country.
Vipul Shah, Chairman of the Gem & Jewellery Export Promotion Council, noted that the duty cut would enhance domestic value addition in jewellery. It would free up approximately ₹1,000 crore that was previously tied up in duty payments, thereby increasing the working capital available to jewellers.
The stock market reacted positively to the announcement. On July 23, shares of jewellery companies surged significantly. Senco Gold share price saw a rise by 12% to ₹1,054.75, driven by a five-fold increase in trading volumes. Titan share price climbed 7% to ₹3,484.90, and Kalyan Jewellers’ shares price went up 4% to ₹550.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
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