Layers of traditional kasumalai or temple jewellery, ears drooping with the weight of jhimikis and their chains, brides’ plaits studded with jadai billa and wrists clattering with bangles — any wedding, housewarming, naming ceremony, or festival feels incomplete without gold. It’s not just a personal jewellery preference, but rich with cultural meaning and is the shape that many families’ savings are moulded into. With this, when PM Narendra Modi requested Indians to put off purchasing gold for a year and followed it by increasing import duty on gold to 15 per cent from six per cent, jewellers and customers were left to make alternative plans that were practical but still held cultural weight. Bride-to-be Niveda KS, an architect shares, “Initially, we had planned to get gold jewellery for both the engagement and wedding but with the increase in prices and the PM’s request, we decided to limit it to the engagement. Instead, we’re opting for imitation gold for the wedding. Some pieces in the trousseau though, like the thali and the wedding rings, will be gold. We’ve limited it to the most culturally significant pieces.”
However, not all customers have been so open to accommodating this change. “In conversations, consumers too are unhappy to curb their spending as jewellery consumers spend only as they need to. They are not hoarding jewellery,” says C Vinod Hayagriv, MD, C Krishnaiah Chetty Group. The duty hike, as he says, will hurt the jewellery industry and may not turn out as hoped. “Hiking customs duty will have an ill effect by reviving illegal imports. Instead, gold bullion (raw material for jewellery) could have been restricted to GST registered buyers,” he adds.
Jayantilal Challani, president of The Jewellers and Diamond Traders’ Association - Madras, says that the announcement has pushed customers into a panic mood. Concurring, Kishore Katariya, MD, Mahalaxmi Gold & Diamond Merchants, adds, “From a business perspective, it becomes important for jewellers to educate customers that gold is traditionally a long-term asset and that purchasing decisions, especially for weddings and family occasions, cannot always be postponed indefinitely.”
Varghese Alukkas, MD, Jos Alukkas agrees, adding that in the short two days between the PM’s address and concrete action being taken to discourage gold imports, the chain noticed mild panic buying. “Some people who were planning to buy gold in the next two weeks, especially those who had weddings coming up, decided to buy early. A lot of confusion spread and we’ve been getting inquiries about whether to buy or sell gold.”
Explaining through a the business perspective, Jayantilal says, “The import duty increase will affect consumers directly, not the jewellers. Jewellers will levy the nine per cent difference on the selling product and it will be solely borne by the buyers.” However, he adds that the jewellers will be affected indirectly, by citing an example, “Imagine a customer has saved to buy around 12 sovereigns, but after the announcement, the customer will be able to buy only 11 sovereigns, so that one sovereign is a loss to the jewellers, because at the end of the day our sales is calculated by the weight volume we have sold and not by the cash (revenue).”
Looking at the larger picture, gold prices have remained sky high since the war started and have ‘risen by 300 per cent in the last five years and by 80 per cent in the last year,’ as Varghese put it. This has already started to affect who buys gold and how they do it. He adds, “Customers in the mid segment and lower-end segment have reduced their purchases. Overall, 50 per cent are exchanging their old gold jewellery for new jewellery because then, they only have to pay the making charges.” Kishore adds that recycling, exchange, and remodelling of old jewellery like kasumalai, manga malai and kemp billai, etc., which are Tamil Nadu’s traditional jewellery, have become much more common. “Many customers now prefer converting old family jewellery into modern designs rather than purchasing entirely new ornaments. This trend has grown significantly in recent months because it allows customers to retain emotional value while managing costs more efficiently,” he adds. The new notification also offers some concessions meant to encourage jewellery recycling.
Jewellery buying trends too have partially started to shift away from gold, as Raj Diamonds’ MD, Eshwar Surana says, “Silver is growing among younger consumers because it is fashionable, versatile, and affordable. There is interest in lightweight diamonds, personalised jewellery, contemporary designs, and everyday collections that match their lifestyle.” Varghese adds, “There is a hike in diamond jewellery purchases where the amount of gold used is less. With lightweight jewellery, pieces which used to come in 100 gm are now 50 gm because people are seeking good designs at lesser prices.”
While platinum may be another premium metal, it is simply not comparable to gold and has not seen any increased interest, Varghese says, adding, “Platinum is something only a few premium customers are interested in and worn at events like cocktail parties. It can’t take the place of gold.”
While a reduction in gold prices is not in sight anytime soon, Eshwar feels in the long run, gold’s deep roots in Indian culture will make sure the industry continues on. Jayantilal believes the situation will subside in the next six months, and urges the customers to not panic. Kishore concludes saying, “My suggestion to the government is to encourage and bring gold deposit schemes for maybe nine to 10 years, with interest and tax exemption, which can bring a huge stock of gold lying idle in lockers for recycling and hence reduce the burden on FOREX reserves.”
(Inputs by Rakshitha Priya G)