As Gold Prices Hike, Jewellers Craft Deal That Works For Everyone. Here’s Insight That You Need To Know

With a hike in import export duties for precious metals, the Indian Gold market is feeling tight. Indian jewellers are turning to an unlikely fix, one that protect the customer's pocket and keeps the trade alive.

For decades, buying gold in India had been simple, you walk in, you pay and you happily walk out with the jewellery. But a single government statements on May 10th,2026, turned that script on its head. Import duty on gold more than doubled from 6% to 15%, and almost overnight, one of the world's biggest gold-consuming nations stopped buying. In the two weeks that followed, demand collapsed from 25 tonnes to 7.5 tonnes in the same period last year, according to the Times Of India.

With GST layered on top of the revised duty, the effective tax burden on every gram of gold purchased has jumped from 9.18% to 18.45% nearly double. The price of 24-karat gold in India stood at Rs. 1.56 lakh per 10 grams, as per Goodreturns data on June 1. Even a modest purchase now carries a significantly heavier price tag. The Indian Bullion & Jewellers Association (IBJA) estimated demand is down 70 % since the hike, with the unorganized sector, which handles roughly 65% of India's gold trade bearing the sharpest blow.

The New Playbook

While large retail chains have learned on inventory buffers and bridal orders to weather the slump, smaller and mid-sized jeweler face a harder road. Some are pivoting to gold exchange programmes, trading in old jewellery to keep the customers engaged. Other are tightening inventory, but here few are working differently turning the crisis into an unlikely opportunity to deepen costumers loyalty.

"Due to the recent statement by honorable PM, the market is facing a sharp drop. So to cope with this, I have introduced a scheme, like a banking or EMI system, where customers deposit the amount with us and after the crisis, they can receive gold jewellery at today's price," said Ajay Kumar Verma, Owner of Narayan Jeweller.

The customers pays now in installments or as a lump sum and collects the jewellery once market conditions ease. For buyers it is a hedge against further prices rises. For the jewellers, it is cash flow and customers retention wrapped into one.

What It Makes Sense Now

The timing matters, PM Narendra Modi's public appeal Indians to hold off on gold purchase for a year has added a psychological weight to an already price-sensitive market. Consumers are not just price conscious but they feel socially nudged to abstain. But for many household, especially those with weddings and ceremonies on the horizon, the need to secure gold at current prices is real. An EMI style scheme offers them a way to do exactly that without straining their budgets today.

Source: Metals Focus, Bloomberg, World Gold Council
Data to 31 March 2026

India's gold demand hit a sharp wall entering 2026. After peaking at 262 tonnes in Q4 2025, the strongest quarter of the year total demand tumbled to 151 tonnes in Q1 2026, a 43% quarter-on-quarter drop.

Jewellery bore the steepest fall, sliding from 145 tonnes to just 66 tonnes, while Bars & Coins pulled back from 96 to 62 tonnes as investment appetite cooled. The only segment that bucked the trend was ETFs, which edged up from 18 to 20 tonnes, signalling that while physical demand froze, a sliver of investors quietly sought paper gold as a hedge.