In a significant policy shift, the Indian government has raised the effective import duty on gold and silver from 6% to 15% to address the weakening rupee and conserve foreign exchange reserves. This decision, reminiscent of the 2013 crisis, has led to a 6% increase in MCX gold futures, pushing prices to ₹1.62 lakh per 10 grams. Conversely, major jewelry stocks, including Kalyan Jewellers and Titan, saw declines of up to 7%. Analysts, such as Vivek Maheshwari from Jefferies, have drawn parallels to past measures that failed to curb gold imports effectively, suggesting that the current hike may inadvertently fuel the grey market. Market experts emphasize that India's cultural affinity for gold is deeply rooted, making it unlikely that such tax increases will significantly alter long-term demand. While the move aims to stabilize the economy amid rising crude prices and geopolitical tensions, it risks creating a larger informal market for gold as consumers seek alternatives to legal channels. The overall sentiment in the jewelry sector remains cautious as stakeholders brace for potential demand slowdowns and increased compliance challenges.