Gold demand records 30 per cent dip in last six months: GJC

To a question if rising tensions between the United States and Iran and its impact on the jewellery industry

The total business volume of gems and jewellery industry has posted a 30 per cent decline in terms of demand over the last six months, a top industry official said on Friday. All India Gems and Jewellery Domestic Council Chairman Anantha Padmanabhan said business has come down by 30 per cent volume wise in last six months and workshops were not engaged while some were shutting down operations.

“We have already approached the Prime Minister’s Office, Home Minister (Amit Shah) and Finance Minister (Nirmala Sitharaman) to reduce imports duty and goods and service tax… business has come down by 30 per cent volume wise in last six months,” he told reporters. Padmanabhan claimed that due to the increase in customs duty, goods and services tax there was anincrease in gold smuggling besides customers were also opting to purchase gold from countries like Dubai, Nepal, Sri Lanka, Singapore.

He suggested that the government during the budget for 2020 may consider reducing the import duty from the current 12.5 per cent to six per cent. Padmanabhan appealed to the government to constitute a ‘steering committee’ before coming out a notification making hallmarking of gold mandatory across the country from January 15, 2021.

The hallmarking of jewellery is to ensure purity of precious metal. Through the steering committee the government may seek industry’s views before issuing the notification on hallmarking, he said. To a query, he said various issues led to the fall of gold imports in 2019 to 710 tonnes as compared to 766 tonnes in 2018.

To a question if rising tensions between the United States and Iran and its impact on the jewellery industry, he said it may lead to volatility in gold prices in 2020. “Prices are going to be fluctuating till US elections,” he said. He was hopeful that the industry would post a 10 per cent increase in business volume in 2020 despite a 30 per cent drop in 2019.