Alarmed by Modi's announcement, jewelry associations to meet PMO officials
What's the story
Shares of jewelry companies such as Titan Company Ltd, Senco Gold, and Kalyan Jewellers fell by up to 11% today. The decline followed Prime Minister Narendra Modi's appeal to citizens during a public event in Hyderabad over the weekend. He urged people not to buy gold for weddings for a year, among other measures aimed at conserving foreign exchange amid the ongoing Iran crisis. In response, jewelry associations across India will meet officials of the Prime Minister's Office (PMO) tomorrow.
Market reaction
Broader impact on stock market
PM Modi's appeal was part of a broader strategy to conserve fuel and foreign exchange. The announcement has had a major impact on the stock market, with shares of Titan and Kalyan Jewellers falling by 6-8% each. Senco Gold's shares have also fallen by 10%, while Thangamayil Jewellery's stocks have witnessed another 5% decline.
Import restrictions
Gold imports at lowest in 30 years
India's gold imports in April are likely to be the lowest in 30 years, owing to an unexpected tax demand on banks. The customs department has started demanding a 3% Integrated Goods and Services Tax (GST) on gold imports, forcing banks to stop shipments. This comes as India, the world's second-largest gold consumer, imported an average of 60 tons per month during the fiscal year 2026.
Industry reaction
Senco Gold warns of potential gold import duty hike
In an interview with CNBC-TV18, Senco Gold's Suvankar Sen said that based on PM Modi's commentary, a gold import duty hike is possible. If this happens, there could be a 10-12% reduction in gold volumes. He also stressed that 50% of gold sales are led by the old gold exchange and called for collaboration between the government and industry to bring 20,000 tons of gold lying in the Indian economy.