Import duty hike likely to weigh on stocks of gold jewellery retailers

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The hike in import duty on gold is designed to dampen import demand. The basic duty hike to 12.5 per cent from 7.5 per cent also has a load of 3 per cent goods and services tax (GST). This hike is designed to ease pressure on the country’s trade account and the rupee.

Gold is the second biggest item on the import list and accounted for $46 billion in financial year 2021-22 (FY22), up from $34.6 billion in FY21. Volumes rose to at least 842 tonnes, according to latest official data between April 2021 and February 2022, versus 642 tonnes