The government has significantly increased import duties on gold and silver from 6% to 15% and shifted these precious metals from the 'free' to 'restricted' category in May 2026. According to reports from Mint, the restrictions include limiting gold imports under the advance authorisation scheme to 100 kg per licence and requiring exporters to fulfil 50% of their export obligation before obtaining fresh approvals. These measures have created immediate market pressure, with gold and silver prices jumping 6-8% due to the higher import costs. On Tuesday, MCX gold June futures edged up 0.17% to ₹1,59,674 per 10 grams, while MCX silver July futures slipped 0.30% to ₹2,75,824 per kg. However, gold prices saw a dip on Friday, May 15, 2026, with rates falling across leading jewellery brands like Tanishq, Malabar Gold & Diamonds, Kalyan Jewellers, and Joyalukkas, as reported by The Economic Times.
Despite the import restrictions, jewellery demand in India continues to show resilience driven by cultural factors. As reported by Mint, Ravi Singh, Chief Research Officer from Master Capital Services, explained that purchases are often driven by weddings, festivals and cultural preferences, which means demand generally remains resilient even when prices move higher. A World Gold Council report revealed that India's gold jewellery demand weakened in the first quarter as soaring gold prices hurt affordability, with jewellery demand volumes falling 19% year-on-year to 66 tonnes - marking the second-lowest first-quarter level since 2000. However, value demand climbed 47% YoY to an all-time high of ₹999 billion, indicating increased consumer spending despite lower purchase volumes.
Rising import duty and PM Narendra Modi's appeal to delay purchases have pushed jewellery brands like Kalyan Jewellers and Malabar Gold & Diamonds to promote gold recycling schemes. These schemes let customers exchange old jewellery for new items, with value based on purity and market prices. Companies use advanced XRF machines for accurate testing, as reported by The Economic Times. Even small-scale recycling can significantly cut India's gold imports, with experts emphasizing the potential impact of these initiatives. New regulations on duty-free gold imports for jewellery exporters have caused shares of Senco Gold, Thangamayil, and Kalyan Jewellers to dip, with the Directorate General of Foreign Trade imposing stricter rules including import caps and physical inspections to curb gold imports and ensure compliance.
According to Seema Srivastava, Senior Research Analyst at SMC Global Securities, companies with strong domestic sourcing, recycling networks, high-studded mix, and export exposure are best positioned to benefit from the import restrictions. As reported by Mint, she recommends Titan, Kalyan Jewellers, Thangamayil Jewellery and Senco Gold as top jewellery stocks to buy. She noted that Titan remains attractive due to its 35% studded share, Tata backing, and Tanishq's brand allowing pricing power to pass on duty impact, while it fell only 1.5% post the May 13 hike versus 5.87% for Kalyan, showing relative resilience.
The import curbs are designed to reduce India's $71.98 billion gold and $12 billion silver import bill, though past experiences show that duty hikes don't typically dent demand. According to Mint reports, investment demand now forms 40%+ of gold consumption, and higher prices could lift ETF premiums as physical supply tightens. Srivastava believes that near-term margins may face pressure from higher gold costs and working capital, but long-term prospects improve as compliance costs eliminate smaller rivals and listed players gain market share. She recommends a 3-5 year view for accumulating quality names like Titan on dips, while midcaps like Kalyan and Senco offer higher risk-reward if execution holds.
