Gold jewellery has not lost its sheen, but it may be going out of reach for average Indians as high prices of the yellow metal push people to spend less on new pieces and stick to essentials. While sales volumes, or the amount of gold sold, are dropping, sales value driven by pricing is growing. Data shows that volumes for gold jewellery retailers dipped 8% in FY26 and could decline another 13-15% this fiscal year to 620-640 tonnes, hitting a decade low (excluding Covid-impacted 2021) due to steep prices and import duty hike, ratings agency Crisil said in a report on Friday.
The data is based on an analysis of 70 gold jewellery retailers which account for a third of the organized sector's revenues. A hike in import duty directly translates into higher retail prices as most of India's local gold consumption is met through imports. Earlier this month, the government raised the import duty on the metal to 15% from 6% to curb non-essential purchases and arrest foreign exchange outflows.
"Despite the expected decline in volume, the sector is poised to achieve a robust revenue growth of 20-25% on-year, driven by higher realizations," analysts at Crisil said. At the current price of Rs 1,60,000 per 10 grams, realizations will be 35-40% higher on-year this fiscal. Realization is the average revenue made per unit, and consumers are now paying more for the amount of gold they are buying.
Jewelers expect the duty hike to dampen near-term demand, keeping entry-level consumers away from the market for some time. For Titan, the jewelry business covering three brands including Tanishq grew 48% year-on-year to Rs 16,047 crore, delivering one of its best quarters post-Covid. However, exchange-driven purchases—swapping old gold for new—were "instrumental" in driving higher value consumer purchases and saw double-digit growth in the March quarter, the company said in its Q4 earnings presentation.
