India Gold Imports Plunge as Record Prices Reshape Consumer Behavior

The Ministry of Commerce data reflects the impact of government-mandated import duty hikes, which rose from 6% to 15% earlier this year. Switzerland remains the primary supplier of India’s gold, accounting for 40% of shipments, though total volume from the nation still saw a 45.4% decline compared to previous cycles. While gold imports for the April-August period show a modest cumulative growth of 3.38%, the monthly crash in August signals a broader retreat in physical demand.

Analysts at Metals Focus suggest that high costs are fundamentally altering the jewelry landscape. Global jewelry consumption is projected to fall to its lowest level since the pandemic, with total weight-based demand expected to drop by more than one-third compared to 2023. As prices stay elevated, consumers are shifting toward smaller purchases, gold-filled products, or direct investments in bars and coins, which offer lower markups. Although jewelry remains a cultural staple, its role as a primary source of physical gold demand is waning, leaving central bank activity and institutional investment to drive the metal's broader bull market.