Indian Gold Jewellery Sales Expected to Hit Decadal Low Amid Rising Prices
Gold jewellery sales volume to hit decadal-low amid high prices: Crisil
Image: Asianet Newsable
The Indian gold jewellery retail sector is projected to experience a significant decline in sales volume, reaching a decadal low due to soaring prices and increased customs duties. Despite this, the sector anticipates a revenue growth of 20-25% driven by higher realisations, with a shift in consumer behavior towards lighter and lower-carat jewellery.
- 01Sales volume is expected to decline by 13-15% year-on-year, reaching 620-640 tonnes.
- 02The central government has raised customs duty on gold from 6% to 15% to curb demand and imports.
- 03Domestic gold prices have surged 55% in the last fiscal year, currently around ₹160,000 per 10 grams.
- 04Sales of gold bars and coins have increased by over 50% as consumers shift towards investment.
- 05Retailers' credit profiles are expected to remain stable despite rising inventory costs and debt.
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The Indian organised gold jewellery retail sector is facing a decadal low in sales volume, projected to decline by 13-15% year-on-year, reaching 620-640 tonnes. This downturn is attributed to soaring gold prices and a significant increase in customs duty from 6% to 15%, aimed at reducing imports and the trade deficit. Despite the volume slump, the sector anticipates robust revenue growth of 20-25% due to higher realisations, with gold prices having surged 55% in the last fiscal year, currently averaging around ₹160,000 per 10 grams. Consumer behavior is shifting towards lightweight and lower-carat jewellery, with investment demand pushing sales of gold bars and coins up by over 50%. Retailers are expected to maintain stable credit profiles, despite rising inventory costs and debt, as overall cash accruals improve. Crisil Ratings highlights potential risks, including fluctuations in gold prices and changes in consumer sentiment that could impact future trends.
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The decline in gold jewellery sales may affect retailers and consumers, leading to a shift in purchasing behavior towards investment products.
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