Starting August 1, gold prices in India are set to decrease significantly, with expectations of a 9% drop due to the government's recent reduction in import duties.
This announcement follows the Union Budget 2024, during which Finance Minister Nirmala Sitharaman revealed a substantial cut in the import duty on gold from 15% to 6%.
With customs formalities now complete, the market is bracing for a wave of more affordable gold beginning Thursday.
The reduction in import duty is anticipated to make gold more accessible for consumers, as the costs associated with importing the precious metal have now been lowered.
During the union budget presentation on July 23, the Finance Minister emphasised the government's commitment to promoting the gold sector, which plays a vital role in the Indian economy.
Yogesh Singhal, Chairman of the All Bullion and Jewellers Association, confirmed that the completion of necessary customs procedures took about a week.
With gold now being imported at the revised duty rate, retail prices are expected to reflect this change.
"Starting August 1, gold subject to the reduced import duty will begin arriving in the country, and consumers can expect prices to drop by approximately Rs 5,000 to Rs 6,000 for every 10 grams," Singhal noted.
The impact of this duty reduction is likely to be felt beyond just retail pricing. Singhal highlighted that the decline in import duties is expected to have a positive effect on the black market for gold as well.
Historically, jewellers had charged a premium on gold that could reach as high as 15% due to illicit import practices.
However, with the import duty reduction, it is anticipated that these practices will be curtailed, thereby reducing the additional charges that jewellers impose on customers.
Since the announcement of the duty cut, the price of gold has already started to decline.
According to the Indian Bullion and Jewellers Association (IBJA), the price of 24-carat gold stood at Rs 73,218 per 10 grams on July 22, just prior to the budget announcement.
As of August 1, prices have dropped to Rs 69,309 per 10 grams, marking a significant decrease of Rs 3,909 per 10 grams since the budget was presented.
Consumers are keenly awaiting the arrival of the cheaper gold, which is expected to invigorate the jewellery market and benefit buyers who have been impacted by high gold prices in recent months.
As the market adjusts to the new pricing structure, experts predict a surge in demand as consumers take advantage of the more affordable rates.
Follow us
