Gold Tariff Hike Triggers Jewellery Stocks Selloff
Gold Tariff Hike Triggers Jewellery Stocks Selloff
India raises gold and silver import duty to 15%, triggering a selloff in major jewellery stocks as markets weigh import costs and the rupee.
India has hiked the basic customs duty on gold to 10% and the Agriculture Infrastructure and Development Cess (AIDC) to 5%, pushing the overall import tax on gold and silver to 15% from 6%. The move, aimed at curbing imports and protecting forex reserves, comes after broad expectations and indicates the government’s resolve to disincentivise non-essential imports. Market watchers note the shift in policy aligns with a broader effort to support the rupee amid global pressures.
In today’s trading session, jewellery stocks slid as investors priced in higher import costs. Kalyan Jewellers India Ltd fell 5.62% to Rs 341.45 on the NSE, Thangamayil Jewellery declined 2.43% to Rs 3,580.70, and Senco Gold Ltd dropped 1.6% to Rs 307.80. Sky Gold And Diamonds Ltd led the losses, plunging 11.22% to Rs 422.50. Titan Company Ltd and a few other jewellery stocks were trading flat after earlier declines, as traders assessed the move’s impact and deemed the selloff potentially excessive. PN Gadgil Jewellers was down about 1% at Rs 620.95, while Tribhovandas Bhimji Zaveri remained flat.
The pressurized mood in the sector stems from fears of tax changes on gold, with market chatter suggesting that the government may continue to tighten import rules. Earlier commentary from analysts noted that the new tariff could curb non-essential imports, with some noting shipments have been held up at customs due to administrative delays. The fresh tariff comes alongside Prime Minister Narendra Modi’s appeal for citizens to avoid gold purchases for a year, adding to the macro context and signaling potential long-term shifts in demand.
Overall, investors will be watching how the imposition of a 15% duty plays out across the sector, including whether consumer demand moderates in the near term and whether the rupee gains some stability as forex reserves are protected by reduced imports.
