Our Bureau
Mumbai
Gold jewellery sales in India are expected to fall by 13-15% in fiscal year 2027, dropping to a decade-low level of 620-640 tonnes, according to a new report by credit ratings agency Crisil. This marks the sharpest decline in ten years, excluding the pandemic-affected fiscal year 2021.
The drop comes after an 8% contraction in sales volumes last fiscal year (FY26). Crisil attributed the steep decline to soaring gold prices and the government’s recent hike in import duty to 15% from 9%. Crisil cited the duty increase would act as a major deterrent for gold jewellery demand among average Indians who are now spending less on new pieces and sticking only to essentials.
India imported nearly 721 tonnes of gold in FY26, resulting in a foreign exchange outflow of around $72 billion. The recent duty hike is expected to dampen demand further for the precious metal. While sales volumes are dropping, sales value driven by pricing is actually growing, meaning retailers may still see revenue gains despite selling less gold.
The organised gold jewellery retail sector, which accounts for nearly one-third of the organised sector’s revenues based on an analysis of 70 retailers, is facing mounting pressure. Inventory holding costs are rising as gold prices stay elevated, with inventory days expected to stretch to 160-180 days from 150 days last fiscal. Higher gold prices may result in inventory gains for retailers, but part of these gains could be passed on to consumers through deeper discounts aimed at supporting volumes.
Gold jewellery has not lost its sheen culturally, but it may be going out of reach for many Indians as high prices push people to reduce spending on new jewellery pieces.
