Jewellery Stocks Rally Up To 14% As Govt Slashes Custom Duty On Gold, Silver

Gold prices India today recorded steep decline after Nirmala Sitharaman declared that the government will slash the basic customs duty on precious metal and silver to 6%. Soon after the announcement, leading jewellery stocks starting witnessing sharp rally in trade today. Tata group stock Titan Company Limited shares soared 6.63% to Rs 3468.15 per share on July 23. Titan Company share jumped over 7% in last 1-week and gained 17% in last 1-year. Shares of Tribhovandas Bhimji Zaveri gained 13.86% in trade today. Current market price of Tribhovandas Bhimji Zaveri Ltd share on BSE IS Rs 155.30 per share. Tribhovandas Bhimji shares zoomed 122% in last 2-year.

Rajesh Exports shares zoomed 6.32% to settle at Rs 316.35 per share in trade today on BSE. Rajesh Exports shares recorded rally of over 10% in last 2-weeks and declined 38% in last 1-year. Meanwhile, PC Jeweller shares rose 5% with current market price stood at Rs 74.16 per share. PC Jeweller share surged 20% in last 2-weeks and gained 137% in last 1-year. PC Jeweller shares also hit 5% upper circuit in trade today.

Meanwhile, Kalyan Jewellers India shares too did not remain untouched from the effects of the latest announcement of slashing the customs duty. Kalyan Jewellers India shares gained 4.53% in trade today to settle at Rs 552.85 per share with gain of 4.53%. Kalyan Jewellers India shares soared 217% in last 1-year. Kalyan Jewellers India also declared a dividend of Rs 1.20 per share and shares will go ex-dividend on 09/08/2024.

Finance Minister Nirmala Sitahraman said. "To enhance domestic value addition in gold and precious metal jewellery in the country, I propose to reduce customs duties on gold and silver to 6% and that on platinum to 6.4%." The FM also proposed to undertake a comprehensive review of the rate structure over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction in disputes, according to a PTI report.

"Customs duty on gold and silver has been reduced to 6 per cent that may lead to a decline in domestic prices and perhaps lift demand. "The existing duty on gold and silver is 15 per cent which comprises 10 per cent of basic customs duty and 5 per cent as Agricultural Infrastructure Development cess," Hareesh V, Head of Commodities at Geojit Financial Services, said.

Cheering the latest move of slashing customs duty on yellow metal, Saiyam Mehra, Chairman, All India Gem & Jewellery Domestic Council said, "The reduction in the basic customs duty on gold and silver to 6% and on platinum to 6.4% is a commendable move by the government. This was a long-standing demand from the All India Gems & Jewellery Domestic Council, which represents the entire gems and jewellery industry. The customs duty reduction will benefit domestic jewellery manufacturers, especially small and medium enterprises, encouraging them to transition gradually to the formal channel. Additionally, the Finance Minister has also increased the scope of working capital loans to SMEs and MSMEs, which will help these units expand their businesses in the future. The extension of the direct benefit transfer scheme to the manufacturing sector, with separate salary and Employees' Provident Fund transfers directly to the accounts of employers and employees, is a wonderful move. This will accelerate employment generation in India. Overall, this budget has focused on 9 key priorities of Viksit Bharat and we are proud to witness it."