India’s gold imports surged to USD 22.70 billion during the April-August 2024 period, up from USD 18.14 billion in the same timeframe last year. The increase is attributed to heightened demand from central banks, jewellers, and a reduction in import duties, as reported in the union budget. This surge reflects India’s growing appetite for gold, especially with the festive and wedding seasons approaching.
On the flip side, India’s gems and jewellery exports dropped to USD 11.10 billion during April-August 2024, a decline from USD 12.43 billion in the same period in 2023. Despite strong domestic demand driven by rising gold imports, export numbers dipped. According to a recent Nuvama report, buying trends shifted in 2024, with affluent buyers leading in the first quarter and a rise in demand for lower-priced items in semi-urban and rural markets in the second quarter.
Retailers are expanding their store networks to meet the growing demand, as predicted by the Nuvama report, which forecasts an 18 percent increase in jewellery volume demand in the second half of 2024. With July and August 2024 gold imports 11 percent higher than last year, the market shows signs of robust recovery. The reduction in basic customs duty on gold from July has boosted the market, ending a five-month period of excess inventory and weak demand.
Despite a 30 percent rise in gold prices compared to the average levels in the second half of 2023, demand remains strong. Central banks’ ongoing purchases have driven price and volume growth. The World Gold Council (WGC) anticipates India’s gold demand to reach 850 tonnes in 2024, marking a 12 percent year-on-year increase. This outlook is buoyed by a strong festive season, increased central bank buying, and lower customs duties.
