Gold duty hike 2026: jewellery stocks hit as tax jumps to 15%

What changed overnight

Jewellery stocks including Titan Company, Kalyan Jewellers, Senco Gold, PN Gadgil Jewellers, Thangamayil Jewellery, PC Jeweller and Tribhovandas Bhimji Zaveri were in focus on Wednesday after the Centre raised import tariffs on gold and silver. The effective import tax was increased to 15% from 6%, with the revised rates taking effect from midnight of May 13, 2026. The stated intent behind the move was to curb overseas purchases of precious metals and ease pressure on India’s foreign exchange reserves. The duty hike also comes at a time when the rupee has been described as one of Asia’s worst-performing currencies.

The new duty structure on gold and silver

The government notification set a 10% basic customs duty on gold and silver imports, along with a 5% Agriculture Infrastructure and Development Cess (AIDC). Together, these take the effective import tax to 15% from 6% earlier. Market participants broadly read the change as an attempt to make non-essential imports costlier and, in turn, reduce import demand.

PM Modi’s appeal and the backdrop

The duty hike follows Prime Minister Narendra Modi’s appeal earlier this week urging households to avoid buying gold jewellery for one year. The appeal was interpreted by some market participants as a signal of reduced appetite for policies that could worsen twin deficits. The commentary around the appeal coincided with sharp falls over the prior two sessions in gold-linked stocks, as investors tried to price in softer demand and higher input costs.

What the market did on Wednesday

Selling pressure was visible across listed jewellers after the duty hike. Shares of Kalyan Jewellers fell as much as 6% and were cited at a day’s low of Rs 340 on the NSE. Senco Gold fell over 3% to a day’s low of Rs 302 in early moves, while Titan was described as relatively resilient, down about 1%. Thangamayil Jewellery was down over 3% in early trade. In another snapshot of the same move, Kalyan was down 5.8% intraday, Senco was down 3.4%, and Titan slipped 1.5%, while the Nifty50 was down 0.14% at 9:35 AM.

Domestic bullion reaction: MCX hits upper circuits

Domestic bullion prices reacted sharply after the duty change. Gold on the Multi Commodity Exchange (MCX) hit a 6% upper circuit at Rs 1.62 lakh per 10 grams. Silver also locked into a 6% upper circuit at Rs 2.95 lakh per kg. The rally reflected the immediate repricing of imported bullion costs into domestic benchmarks.

Why higher duties matter for jewellers

A higher import tax can push up domestic gold prices, which can affect retail demand for jewellery. Analysts cited in the reports cautioned that costlier jewellery may lead buyers to postpone purchases, especially in price-sensitive segments, including wedding and festive demand. The duty hike was described as a near-term negative for jewellery companies because it raises raw material costs and can reduce volumes if consumers defer purchases.

Trade deficit, forex reserves and the rupee angle

The duty hike is also being viewed through a macro lens. Higher duties could dampen demand in the world’s second-largest consumer of precious metals. At the same time, they may help narrow India’s trade deficit and support the rupee by reducing the import bill for gold and silver. A note cited in the coverage described the policy adjustment as aimed at protecting foreign exchange reserves and narrowing the widening trade deficit.

Additional categories covered: platinum and jewellery components

Beyond gold and silver, the revised import duty regime also covers other precious metals and inputs. Platinum and related precious metal components such as hooks, clasps, clamps, pins and screw backs used in manufacturing will attract a 10% duty. Separate rates were also mentioned for certain sub-categories: import duties on gold and silver jewellery findings were stated at 5%, while platinum findings were set at 5.4%. Spent catalysts or ash containing precious metals were described as eligible for a concessional duty of 4.35%, subject to compliance conditions.

The import pipeline before the hike

The duty hike comes after recent frictions in the import channel. Nomura had earlier suggested the government may disincentivise non-essential imports like gold, including via a customs duty hike. It also noted that gold shipments have been stuck at customs since March due to administrative delays. Separately, India began levying a 3% integrated goods and services tax (IGST) on gold and silver imports, after which banks halted imports for more than a month. April imports were reported to have fallen to a near 30-year low, and while banks resumed imports after paying the 3% IGST, bullion dealers told Reuters imports could fall again after the duty increase.

Key facts at a glance

Market impact and what investors are tracking next

The immediate market impact was a sharp repricing of jewellery counters alongside a jump in domestic bullion benchmarks. For listed retailers, the near-term focus will likely remain on how quickly higher import costs flow into retail prices and whether demand holds up amid already-elevated gold prices. Investors are also watching whether the duty hike delivers the intended macro outcomes, including lower bullion imports and some support for the rupee, while monitoring concerns flagged in coverage around the risk of grey-market activity when import costs rise.

Conclusion

India’s move to raise the effective import tax on gold and silver to 15% from 6% has put jewellery stocks under pressure and lifted domestic bullion prices sharply. The duty structure of 10% basic customs duty plus 5% AIDC takes effect from May 13, 2026. With gold imports already disrupted by earlier administrative delays and a 3% IGST change, the next set of data points to watch will be import trends and how the higher landed cost impacts retail demand.