India’s sharp increase in import duty on gold and other precious metals could keep jewellery demand under pressure for as long as a year, according to Senco Gold, as elevated crude oil prices and instability in the Middle East continue to weigh on the broader economy.
Suvankar Sen, managing director and chief executive officer of Senco Gold, said the higher duty structure is likely to remain in place until geopolitical tensions ease and global energy markets stabilise.
“The duty would remain high till the Middle East crisis remains, crude oil prices remain high and the oil supply chain becomes stable. So, maybe, around one year it shall stay at these levels,” Sen said.
Also Read: India raises gold, silver import duty to 15%
The comments come after the Indian government raised import duty on gold and silver to 15% from 6%, while platinum import duty was increased to 15.4% from 6.4%. The move is part of a broader effort to conserve foreign exchange reserves, contain non-essential imports and protect macroeconomic stability amid rising global uncertainty linked to the ongoing West Asia conflict.
India imports nearly all the gold it consumes, making the country particularly vulnerable to swings in global prices, shipping disruptions and currency pressures.
Also Read: Why India hiked gold import duty to 15%
According to Senco's Sen, the immediate impact of the higher import duty is likely to be visible in jewellery volumes rather than overall value sales.
“The volumes might get impacted by 10-15 percent but value wise it will remain at higher level. Consumers will buy lighter weight jewellery,” he said.
The remarks indicate that while fewer grams of gold jewellery may be sold, elevated bullion prices could still keep the industry’s overall revenue base relatively firm.
Jewellers across India have already been dealing with record-high gold prices, which have pushed many consumers towards smaller-ticket purchases, lighter ornaments and lower-carat designs in recent months.
The latest duty increase could deepen that trend, especially in discretionary buying segments where consumers are more sensitive to price movements.
Sources have linked the duty increase directly to the risks emerging from the ongoing conflict in West Asia, which has unsettled crude oil markets and raised concerns over supply-chain disruptions.
Higher oil prices pose a major challenge for India because the country depends heavily on imported crude. Rising energy costs can widen the current account deficit, weaken the rupee and add inflationary pressure across the economy.
Against that backdrop, policymakers have moved to curb imports considered non-essential, including precious metals, which account for a significant outflow of foreign exchange.
The government had previously reduced gold and silver import duties in the 2024-25 Union Budget when external pressures had eased and foreign exchange conditions were more stable. The latest reversal signals growing concern within policymakers over external-sector risks as geopolitical tensions intensify.
