Jewellery stocks experienced significant declines on Friday as Kalyan Jewellers shares tumbled nearly 6% to trade at ₹415.25 apiece, while Titan shares dropped nearly 3% to trade at ₹4,330 apiece. In contrast, MMTC shares skyrocketed around 16% to ₹71.64 apiece following market rumours that the PSU company was permitted to import gold while other applications were rejected. The sharp movements reflect investor concerns over the halt in precious metal imports and potential supply chain disruptions ahead of key festivals.
Gold imports into India have experienced a sharp decline due to regulatory and system-related issues, according to Surendra Mehta, Secretary at the India Bullion & Jewellers Association. As reported by Reuters, more than five tons of gold are stuck without customs clearance due to the absence of a fresh DGFT order authorising bullion imports. 'Virtually the imports have stopped because of this,' Mehta stated, highlighting that the issue stems from a system showing a 3% GST payment requirement on imports, despite exemptions being in place. The previous order issued in April 2025 was valid until the end of the last financial year on March 31, but banks are now awaiting a fresh DGFT directive. Banks have halted new import orders from overseas suppliers due to uncertainty over the timing of the DGFT order, with sources indicating they expected the order in early April but have received no update so far. The Economic Times reports that Indian banks have halted gold and silver import orders from overseas suppliers, with the DGFT not immediately responding to requests for comment.
The import restrictions have extended beyond gold to affect silver imports, with around 8 tons of imported silver also stuck without customs clearance, according to Reuters. This broader impact on precious metals could significantly affect the jewellery manufacturing sector, which relies heavily on both gold and silver imports. The halt in silver imports particularly concerns the industry as it prepares for Akshaya Tritiya, a key festival period for precious metal demand. Gold and silver inventories from previous months' imports are experiencing drawdowns, with the market now relying on sales from exchange-traded funds, which are seeing redemptions. As reported by The Economic Times, there is no point in placing new orders when earlier consignments cannot be cleared, according to bullion dealers.
The import restrictions have extended beyond gold to affect gold ore imports by refiners, as reported by CNBC TV18. Licences are not being renewed or issued, limiting imports to older approvals and potentially impacting the refining industry and jobs. Mehta warned that this could significantly affect the refining sector's operations and employment levels in the domestic market. The Economic Times reports that the halting by Indian banks of gold and silver import orders from overseas suppliers and the tons of the metals stuck at customs due to the absence of a formal government order authorising bullion imports have not been previously reported.
The India Bullion & Jewellers Association has warned that restricting imports will definitely create a shortage in the Indian market, as reported by Reuters. 'There is a need to bring clarity and ensure imports resume,' Mehta stated, specifically warning that shortages may emerge after the festive buying period, when demand typically peaks. India's gold demand in 2025 fell to 710.9 metric tons, the lowest level in five years, according to the World Gold Council. Without fresh imports, Indian jewellers could face significant supply shortages as the country relies on imports to meet nearly all its demand. As reported by The Economic Times, without imports, supply shortages will emerge and premiums will rise after Akshaya Tritiya, Mehta said, referring to the second-largest gold-buying festival in India. The association is seeking clarity from the Directorate General of Foreign Trade (DGFT) on pending notifications to address these systemic issues and restore normal import operations.
