India's Jewellery Sector Under Pressure as Government Increases Import Duties on Gold and Silver

The jewellery sector stocks are in focus today, May 13. This is after the Government increased import duties on gold, silver and several other precious metal products. The announcement comes close on the heels of PM Modi’s appeal for austerity to citizens. This latest development comes at a time when concerns around increasing imports, pressure on foreign exchange reserves as well as the elevated global commodity prices continue to remain in focus. In today’s trading session, the share price of major jewellery companies including Titan Company , Kalyan Jewellers India , PC Jeweller, Senco Gold and Thangamayil Jewellery are in the spotlight as investors assess the impact of higher import costs on demand, pricing and margins. The latest notification issued by the Ministry of Finance late Tuesday (May 12) night revised customs duties on gold and silver imports to 10% from the earlier 6%. The revised rates came into effect immediately from midnight. At this hour, Kalyan Jewellers India share price plunged 5%, while Sky Gold and Diamonds declined 5.4%. Thangamayil Jewellery also slipped 4%, followed by Rajesh Exports, which dropped 3%%. Goldiam International fell 2%, while Titan Company traded lower by 1%. Meanwhile, P N Gadgil Jewellers is down 0.81%. According to the notification, the revised customs duty structure covers not only gold and silver but also several jewellery components and industrial-use precious metal imports. Products such as hooks, clasps, clamps, pins and screw backs used in jewellery manufacturing will also now attract a 10% import duty. The notification further amended earlier customs notifications issued in 2000, 2018, 2021 and 2025. The government has also increased duty provisions on imports of spent catalysts and ash containing precious metals used for recovery and recycling purposes, subject to specified conditions. The Ministry of Finance notification stated, “This notification shall come into force on the 13th day of May, 2026.” The latest duty hike comes just days after Prime Minister Narendra Modi appealed to citizens to reduce gold purchases for a year, especially for weddings. Speaking at an event in Hyderabad earlier this week, Modi also urged people to conserve fuel, use public transport, avoid unnecessary foreign travel and reduce non-essential spending amid rising global uncertainties. The comments had already triggered weakness in jewellery stocks during Monday’s trading session because the sector remains closely linked to discretionary consumption and gold demand trends. According to government data, India’s gold imports touched a record $71.98 billion during FY25-26, a 2% rise compared to the previous year. India remains one of the world’s largest importers of gold, which means any increase in import duties directly impacts raw material costs for jewellers. Higher import duties generally make gold more expensive in the domestic market. Moreover, this in a way affects the jewellery demand , particularly in price-sensitive categories and wedding-related purchases. In addition to this, companies which are operating in the organised jewellery space may also have to manage rising working capital requirements and inventory costs if gold prices remain elevated globally. At the same time, the sector is already dealing with volatile gold prices, fluctuating consumer demand and changing spending patterns. The key factor to watch is how jewellery companies respond to the higher import duties over the coming quarters. Investors may also watch whether companies pass on the higher costs to consumers or absorb part of the impact through margins and promotional strategies. The key triggers that are likely to remain going forward include gold price trends, festive season demand, wedding-related consumption and further policy announcements from the government.