Mumbai

India’s gold demand declined 6 per cent year-on-year to 131.4 tonnes during the April-June quarter, as higher prices, increased customs duty and seasonally weak jewellery purchases dampened consumer demand, according to the World Gold Council (WGC).

Despite the decline in volumes, the value of gold consumption surged 50 per cent to a record Rs 1.98 lakh crore, reflecting consumers’ willingness to buy gold even at elevated prices.

WGC Regional CEO (India) Sachin Jain said the slowdown was driven by a subdued buying season, the increase in customs duty and Prime Minister Naren-dra Modi’s appeal to reduce non-essential gold purchases to help curb imports.

Jewellery demand fell 15 per cent to 75.1 tonnes, while investment demand re-mained resilient. Demand for gold bars and coins rose 9 per cent to 50.3 tonnes, and Indian Gold ETFs recorded net inflows of 4.2 tonnes, even as global ETFs witnessed outflows.

The WGC also expressed concern over the possible rise in gold smuggling fol-lowing the customs duty hike, describing illicit trade as one of the biggest risks facing the industry. Gold imports during the quarter declined 23 per cent to 98.1 tonnes, while recy-cled gold supply fell 17 per cent.