Mumbai

India'sgold demand is expected to contract by 50-60 tonnes this calendar year, around 10 per cent lower than the previous year, following the import duty hike, according to the World Gold Council (WGC). "Looking at 2026 as a whole, we estimate that combined jewellery and bar and coin demand could decline by around 50-60 tonnes, around 10 per cent lower than the previous year, due to the impact of the import duty hike," WGC said in its India gold market update. The gold import duty was raised sharply from 6 per cent to 15 per cent, making it the single-largest increase on record and fully reversing the duty cut of July 2024. The Prime Minister has also appealed to consumers to avoid buying gold for a year.

Other factors, such as the gold price, changes to income levels, inflation, or effects from the monsoon, would further influence annual demand, it added. "Our econometric models suggest that changes in import duties tend to impact gold demand in both the short and long term, although the impact differs across jewellery and investment products such as bars and coins. Investment demand appears more sensitive to duty changes, while jewellery demand has shown greater resilience," said WGC.