Lower import duties fuel India's gold rush

26 Sep 2024 , 12:26 PM

Indian gold consumption is expected to rise in the coming months as a lower import tax and a busy festival and wedding season boost purchases in the world’s second-largest consumer of the precious metal.

Imports more than quadrupled to 140 tonnes in August from the previous month, according to the World Gold Council, after the government reduced the customs duty to 6% from 15%. The good trend is expected to continue, as a bountiful monsoon this year has improved crop expectations, potentially increasing farmers’ disposable incomes – a big consumer group.

The revisions might increase gold demand by 50 tonnes or more in the second half of 2024 compared to last year, he said, adding that overall requirements could range from 750 to 850 tonnes this year.

The momentum comes after inbound shipments climbed only 4.8% year on year to 305 tonnes in the first half of this year, according to the Commerce Ministry.

The purchases strengthen the South Asian country’s status as a worldwide hotspot for physical consumption, at a time when jewellery sales have plummeted in China, the largest buyer. Consumers there have been dealing with an economic downturn during what should be one of the busiest times of the year.

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