The All India Gem & Jewellery Domestic Council (GJC) has urged the Government to relook at the taxation policy and customs duty hikes as it encourages unofficial trade and disrupts genuine trade amid volatile gold prices.
Gold prices peaked at ₹170,480 per 10 grams in January, before falling to about ₹142,800 by late June. Silver too witnessed a dramatic surge, crossing ₹402,490 per kg in January — its first time above the ₹4 lakh mark — before easing to the ₹225,940 range by June, said GJC in its half yearly review of the gold and silver market.
The Council emphasised that taxation changes, customs duty hikes and global geopolitical tensions have been the defining factors of the year so far.
While investors flocked to gold as a safe-haven, jewellery demand softened due to affordability pressures.
The increase in customs duty announced in May pushed domestic prices higher and weighed on retail demand. GST burden and compliance requirements continued to challenge margins, prompting calls for rationalisation, said GJC.
Ongoing conflicts in West Asia and broader geopolitical instability have heightened volatility, while the depreciation of the rupee against the US dollar added pressure on domestic prices. Inflationary trends and central bank diversification into gold reserves further underlined the safe haven appeal of the metal, even as corrections set in after the initial peaks.
Chairman of GJC said the fall in bullion prices are driven by profit taking, a stronger US dollar index and expectations of prolonged high interest rates globally.
“Global sentiment has also shifted as safe haven demand eased after recent geopolitical panic cooled,” he added.
While futures saw a meaningful drop, retail prices have remained elevated, with 24K gold continuing to trade around ₹14,250–₹14,400 per gram through late June this year, he said.
Looking ahead, the upcoming festive season and the peak wedding calendar in the second half of the year are expected to provide strong support to jewellery demand, he added.
Vice Chairman, GJC said the next six months will depend heavily on geopolitical stability and government policy, particularly in the context of customs duty and taxation.
He added that “Excessive duties risk encouraging unofficial channels, hurting consumers and weakening the trade.”
“We urge policymakers to balance revenue needs with industry sustainability, ensuring that reforms strengthen rather than strain the sector,” he adds.
“The industry stands ready to collaborate with the government so that national interest, consumer welfare and market stability move forward together,” he said.
