As gold dealers raise prices steeply after tariff hike; Centre may step in

Ziraat Times Team Report

New Delhi: Goldsmiths and jewellers across India on Wednesday are reported to have sharply increased retail gold prices following the Union Finance Ministry’s decision to raise tariffs/customs duty on gold imports by 15 percent. However, the sudden increase has triggered concern among consumers and policymakers alike, as the revised duty was intended to apply only to fresh imports and new consignments entering the country.

Soon after the announcement, jewellers in several markets reportedly revised gold prices upward not only for future imports but also for gold already available in existing domestic inventory. This effectively passed on the burden of the higher import duty to consumers immediately, even on stocks that had been imported earlier at lower tariff rates.

Officials in the Finance Ministry have expressed concern over the development. A senior official indicated that the government will now work with associations representing goldsmiths and jewellers to devise a mechanism ensuring that the enhanced tariff is not retrospectively reflected in prices of existing gold stock already present in India.

According to officials, the intent behind the tariff revision was to regulate future imports and address fiscal and trade considerations, not to create an immediate windfall gain on pre-existing inventory held by traders and jewellers.

The development has also sparked strong reactions from customers, many of whom described the instant price escalation as unfair. Buyers argued that consumers are effectively being charged additional costs on gold that was imported before the new duty structure came into effect.

Industry observers say the issue has highlighted the absence of a transparent mechanism to distinguish between pre-duty and post-duty inventory in the bullion and jewellery trade. Economists note that unless addressed quickly, the situation could temporarily dampen retail demand, particularly during the ongoing wedding and festive purchase season.

Government officials are expected to hold consultations with trade bodies in the coming days to explore possible compliance norms, inventory disclosures, or pricing guidelines aimed at preventing undue price escalation on older stock.