Zerodha founder and CEO Nithin Kamath highlighted the tight regulation in Indian financial markets following the Ministry of Finance's surprise import duty hike on gold and silver. As reported by ANI, Kamath noted the absence of unusual trading activity before the announcement, contrasting it with potential scenarios in Western markets where privileged information might be exploited through regulated futures markets, derivative contracts, or prediction platforms such as Polymarket and Kalshi. "Just another reason why Indian markets, despite all their flaws, are far more tightly controlled in these grey zones than many Western markets," Kamath stated on X, emphasizing the contrast between India's regulatory approach and that of the United States and other Western nations. The CEO's latest observations on LinkedIn further emphasize that "the grey zone has sharper teeth" in India, with no futures twitch or whisper before the storm, while across the ocean, leaks become ladders and privileged ears mint gold from chaos.
Kamath pointed to the government's late-night decision to raise import duties on gold and silver to 15% and highlighted how there were no unusual movements in open interest, prices, or trading volumes in gold and silver contracts ahead of the announcement. According to ANI, he noted the lack of volatility or suspicious volume shifts before the official government notification became public, writing on microblogging platform X that "the news about import duties on gold and silver going up to 15 per cent came late last night. The interesting thing: neither open interest, prices, nor volume in Gold and Silver showed any unusual moves in the hours leading up to the announcement." His latest analysis on LinkedIn reveals that "the absence of any detectable positioning beforehand" is particularly striking, as in most developed markets, especially where derivatives and prediction markets are deep and liquid, information leakage often shows up indirectly through abnormal OI build-up, sudden volume spikes, or odds shifting on event contracts. The scary global trend is that "insider trading is no longer just someone tipping a stock pick. It's evolving into trading macro policy decisions, wars, sanctions, tariffs, and regulation through instruments that sit in legal grey zones."
The Ministry of Finance has updated customs duty rates for various precious metals and jewellery findings from 6% to 15%, with the changes taking effect today. As reported by ANI, the government has imposed a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports, taking the effective import tax to 15% from 6%. Platinum and related precious metal components such as hooks, clasps, clamps, pins and screw backs used in manufacturing will also attract a 15.4% duty, up from 6.4%. The changes also apply to related items such as gold and silver dore, coins, and findings.
Kamath also referred to previous allegations and reports linked to crude oil trading and market activity during the Iran conflict, where questions were raised around individuals allegedly trading through futures contracts and prediction markets ahead of or around important geopolitical announcements. According to ANI, he expressed concerns about the increasing normalisation of such activity, stating that "it's kind of insane how casually people in power seem to monetize privileged information. At some point, this stops looking like 'market participation' and starts looking like blatant insider trading with better branding." His latest analysis on LinkedIn highlights that "the scary part globally is that insider trading is no longer just someone tipping a stock pick. It's evolving into trading macro policy decisions, wars, sanctions, tariffs, and regulation through instruments that sit in legal grey zones." He contrasted this with the regulatory environment in Western markets, noting that "If this had happened in the United States, I'm fairly sure some of the people close to the decision-making process would have found a way to trade it, either through regulated futures markets, other derivative contracts, or prediction markets like Polymarket and Kalshi."
The comment came after the central government hiked customs duty on imports of gold, silver and other precious metals, with the revised rates taking effect from midnight. According to ANI, Kamath emphasized that despite India's financial markets having flaws, they remain far more tightly regulated in certain grey areas compared with several Western markets, with the absence of suspicious activity before such a major policy move standing in sharp contrast to what he believes would likely happen in markets such as the United States. His latest analysis on LinkedIn reveals a more nuanced perspective, noting that "the retail investor with a small portfolio who would always be last to know and first to lose if this kind of information travelled early" is better protected in India than in most markets. He acknowledges that "Indian markets have real problems. But on this specific thing, the retail investor is better protected than in most markets" and that "the real question is: Do investors want completely free markets where insiders and powerful players can monetize information faster than everyone else? Or slightly tighter markets where retail investors at least get a fairer playing field after announcements become public?" The CEO's observations highlight the significant difference in market transparency and regulatory oversight between Indian and Western financial markets.
