Jewellery segment shares fell sharply on Monday after Prime Minister Narendra Modi's appeal to reduce non-essential gold purchases for a year. According to reports, stocks like Senco Gold, Kalyan Jewellers, Titan, and PC Jeweller saw notable declines as investors reacted to possible pressure on jewellery demand. The remarks came amid concerns over rising oil prices, geopolitical uncertainty, and pressure on India's import bill. Benchmark indices also traded lower, with the Sensex and Nifty falling sharply during the session, highlighting how policy signals and global concerns can quickly influence market sentiment.
The Tamil Nadu Jewellers Federation (TNJF) came forward in support of the central government's decision of hiking import duty to 15% from earlier 6% on gold and silver till March 31, 2027. As reported by Goodreturns, this decision is expected to reduce burden of high imports for the country's economy and conserve foreign exchange reserves. TNJF president B. Sabarinath stated that they urged people to avoid unnecessary gold buying in the current economic conditions. PM Modi, speaking at a rally, urged citizens to help conserve foreign exchange by avoiding unnecessary foreign travel, destination weddings abroad, and avoidable gold buying.
The government has implemented comprehensive measures to control gold imports beyond the duty hike. As reported by Press Trust of India, the Centre has imposed a strict 100 kg limit on duty-free gold imports under the Advance Authorisation Scheme to prevent traders from exploiting sudden price differences. This preventive measure comes amid the ongoing crisis in West Asia, which has driven up the cost of essential imports such as crude oil and fertilisers. India's gold import bill hit an all-time high of USD 71.98 billion in 2025-26, representing a surge of over 24%, driven by rising global prices rather than import volumes.
Following the government's decision, Tamil Nadu jewellers collectively made a voluntary decision to stop selling gold coins and discontinue promotional schemes linked to gold savings and investments. According to reports, TNJF requested the central government to also ban Gold Exchange Traded Funds (ETFs) and DigiGold schemes, citing that these digital gold schemes indirectly motivate physical gold buying. The latest developments show that jewellers are implementing these restrictions across the country, not just in Tamil Nadu. Despite these restrictions, some jewellers continue to promote gold savings schemes, with VKN Jewellers actively advertising their Gold Savings Scheme on social media platforms.
South India dominates the gold consumption market in India with 40-45% share, followed by 25% share in West India, 20% share in North India and 15% share in East India. As reported by Goodreturns, Tamil Nadu leads in both private gold ownerships and share of household assets, which is more than 28%. This makes Tamil Nadu a key market for precious metals, with states like Kerala and Tamil Nadu being the biggest gold consumers.
Gold rates in Chennai, the capital city of Tamil Nadu, crashed sharply on May 15. According to Goodreturns, 24 carat gold price plunged by ₹10,900 in 100 grams to ₹16,30,900 and 10 grams gold slipped by ₹1,090 to ₹1,63,090. The current gold prices in Chennai stand at ₹16,309 per gram for 24 karat gold, ₹14,950 per gram for 22 karat gold, and ₹12,470 per gram for 18 karat gold. However, in May month so far, gold rates are up by 7-8% in Chennai.
