Jewellery stocks experienced severe selling pressure following the government's decision to hike customs duty on gold imports from 6% to 15%. According to CNBC TV18, Titan, Kalyan Jewellers, and Senco Gold have lost over ₹50,000 crore in market capitalization over the last two sessions, with declines ranging from 11% to as high as 15% across Monday and Tuesday. The government has also increased the cess on these imports to 5% from 1%, making gold now expensive by ₹12 lakh per kilogram and silver by ₹22,000 per kg. Sources told CNBC TV18 that the revenue department believes the duty hike might not act as a deterrent for importers, as precious metal imports are more on a demand basis.
Leading jewellery retailers are advocating for greater focus on recycling, exchange, reuse, and monetisation of existing domestic gold to reduce import dependency rather than deferring purchases. According to Rediff Money, Senco Gold CEO and MD Suvankar Sen stated that the economy is passing through a challenging phase where the current account deficit is under pressure and imports need to be controlled. He emphasised that consumer jewellery buying is not directly connected to fresh gold imports alone, since a large part of the industry already functions through old gold exchange and recycled gold. The industry plays an important role in supporting employment for karigars and artisans across the country, with the endeavour to fulfil consumer demand while contributing toward reducing dependence on fresh gold imports for the benefit of the country.
Kerala-headquartered Kalyan Jewellers has announced the launch of the 'Nation First – Gold4India Initiative' to activate dormant household gold reserves. According to company reports, the strategic framework aims to drive old gold exchange programmes, promote adoption of lighter 18 carat jewellery, and implement gold monetisation schemes alongside a gold recirculation drive. The initiative comes amid Prime Minister Narendra Modi's appeal to delay gold purchases to help alleviate stress on the country's foreign exchange reserves. As per Rediff Money, Malabar Group Chairman M P Ahammad stated that India possesses one of the world's largest privately held gold reserves while continuing to rely significantly on imports to meet domestic demand.
The company's 'Nation First – Gold4India Initiative' targets reducing imports by five tonnes of gold over the financial year. As reported by Kalyan Jewellers, India possesses one of the largest privately-owned gold reserves globally, with much of this gold lying idle in bank lockers, household vaults, inherited collections, and unused jewellery accumulated over decades. According to CNBC TV18, Senco Gold's MD & CEO Suvankar Sen stated that the duty hike will result in a 10% to 15% decline in gold imports, while encouraging customers to exchange old gold in return for new jewellery. He added that he does not see much risk to the company achieving its value growth guidance of 20% to 25% for financial year 2027.
Under the programme, customers at Kalyan Jewellers' 342 stores will be encouraged to exchange old, unused, broken, or outdated jewellery, thereby reducing the need for equivalent quantities of newly imported gold. According to the company, the firm plans to open dedicated 'Encash Gold' counters across its network to provide consumers with professionally managed and transparent gold monetisation experiences. These counters will enable patrons to unlock liquidity options by using idle gold holdings. As per Rediff Money, PNG Jewellers Chairman Dr Saurabh Gadgil noted that currently most purchases involve recycling, meaning people are exchanging their old jewellery for new items, with consumers becoming more prudent in view of national interest.
Malabar Group Chairman M P Ahammad has suggested a jeweller-assisted collection and facilitation framework operating under bank and regulatory supervision, with digital tracking systems and transparent processing mechanisms to improve customer confidence and operational efficiency. According to Rediff Money, he noted that while the Gold Monetisation Scheme was introduced to reduce import dependence and monetise idle domestic gold holdings, public participation remained limited due to longer lock-in periods, lower perceived returns, limited redemption flexibility, and procedural challenges. The industry faces concerns about potential impact on employment, with Dr Gadgil warning that if consumer demand goes down, the industry will be affected, which will affect jobs of millions working in the sector, one of the largest employment providers in the country.
