Import Duty on Gold, Silver Findings Up 5%

Impact of Increased Import Duties on Gold Findings and Spent Catalysts

Source and citation: Information adapted from an ET Bureau article published on January 24, 2024.

Analysis for Layman

The Indian government has raised the import duty on gold findings from 10% to 15%. Gold findings refer to small components like hooks, clasps, and pins made of gold that are used in jewelry. Additionally, a new 5% Agriculture Infrastructure Development Cess will be added to the existing 10% customs duty.

Simultaneously, the duty on spent catalysts, which contain residual precious metals, has been increased to 14.35%. This decision aims to create consistency in import duties between findings, catalysts, and outright gold bullion imports.

Previously, the lower duty on findings and catalysts created an opportunity for traders to avoid paying the full duties applicable to the underlying gold value. The higher flat rates on all forms of gold will help close this loophole and generate additional revenue for agricultural infrastructure programs.

Import Duty on Gold, Silver Findings Up 5%

Impact on Retail Investors

For retail investors who are interested in gold, the increase in import duties on gold findings and catalysts creates a more consistent approach to taxation across the gold value chain. However, for the broader bullion industry and jewelers, the additional cess levy may lead to short-term price increases as they seek to pass on the higher costs to consumers.

Gold prices could see a slight boost in 2023 as supply inflows moderate, while demand for jewelry remains resilient due to weddings and festive buying. This provides retail investors with an opportunity to benefit from any uptick in gold-backed ETFs or sovereign bonds.

However, there is a long-term price risk if smuggling increases to bypass higher duties. Illegal gold inflows can disrupt the domestic supply-demand dynamics. Therefore, it’s essential to monitor enforcement against unofficial channels.

Overall, while the government aims for a positive revenue impact, actual outcomes will depend on compliance and efforts to curb illegal trade. For retail buyers, having a duty-paid certificate for resale can offer protection.

Impact on Industries

The increase in gold duties can have a positive impact on domestic refining and jewelry manufacturing industries in 2023 by discouraging the import of finished gold products. This, in turn, may boost local production.

Gold refiners and jewelers such as Rajesh Exports, TBZ, Thangamayil, and Kalyan Jewellers could see improved profitability as they source more raw gold domestically for their products. Their stock prices may relatively outperform.

However, smaller unorganized manufacturers may still source findings illegally to avoid compliance costs. Effective enforcement against unofficial gold trade will need to be scaled up to prevent unfair competition against the formal sector.

Mandatory hallmarking can help facilitate a broader shift towards organized sourcing over time. Overall, while this is positive for the “Make in India” initiative, policy stability is essential to prevent volatility in the domestic gold value chain.

Long Term Benefits & Negatives

In the long run, the increase in import duties can stimulate a more self-reliant gold ecosystem, reducing dependence on finished goods imports. With assured quality, domestically produced jewelry can penetrate export markets currently dominated by countries like Dubai and Turkey.

The policy should continue to discourage speculation and the culture of hoarding gold, promoting higher public investment in productive assets rather than idle gold stockpiles.

Gradual formalization of small jewelers, improved traceability to combat money laundering, and access to institutional credit can make the industry sustainable while improving working conditions for laborers.

However, measures such as accelerating recycling, implementing voluntary disclosure schemes to mobilize temple and household gold, and reducing GST on jewelry should complement the import duties in a balanced gold policy that reduces illegal channels.

Short Term Benefits & Negatives

In the near term, the increase in import duties may lead to some volatility in gold prices and jewelry purchases during the 2023 wedding season if the additional costs are quickly passed on to retail buyers.

However, resilient demand from weddings and festive gifting is expected, enabling jewelers to absorb some cost pressures as volumes increase. Margins may be impacted temporarily.

For the broader economy, higher gold duties will increase import tax revenues, which can be used to fund critical agricultural infrastructure projects such as irrigation and warehouses under government programs.

But by potentially spurring smuggling, the state’s capacity to enforce measures against illegal channels may face challenges in 2023, limiting the actual collection of additional revenue. Monitoring the effectiveness of the policy in practice will be essential to fine-tune measures.

Impact of Increased Import Duty on Gold and Silver Findings:

Indian Companies:


  • Jewelry Manufacturers:

    • Titan Company Limited: A leading Indian jewelry manufacturer, Titan relies heavily on imported gold findings. Increased import duty could make locally-produced findings more competitive, potentially boosting their market share and margins.
    • Rajesh Exports Ltd.: Another major player in the jewelry industry, Rajesh Exports could benefit from increased demand for its domestically manufactured gold findings.
    • PC Jeweller Ltd.: With a focus on affordable jewelry, PC Jeweller could see increased demand for its gold jewelry with cheaper local findings, further strengthening its position in the mass market.
  • Gold Refining Companies:

    • MMTC Ltd.: As the primary gold importer in India, MMTC stands to benefit from increased refining opportunities due to higher import duty on finished findings.
    • Hindustan Zinc Ltd.: With its gold refining capabilities, Hindustan Zinc could see increased demand for its refined gold bars, used by jewelry manufacturers for local finding production.


  • Jewelry Importers & Retailers:
    • Tribhovdas Bhimji Zaveri Ltd.: Importers of finished gold jewelry with findings will face higher costs due to the duty hike, potentially impacting their margins and competitiveness.
    • Senco Gold & Diamonds Ltd.: Retailers heavily reliant on imported gold jewelry could see reduced profitability due to increased costs, potentially impacting consumer demand.

Global Companies:


  • International Gold Finding Manufacturers:
    • Richemont SA: This Swiss luxury conglomerate owns Cartier and Van Cleef & Arpels, brands with a strong presence in India. Higher import duty on findings could benefit their local manufacturing units in India.
    • Chow Tai Fook Jewellery Group Ltd.: A leading Hong Kong jewelry retailer, Chow Tai Fook has manufacturing facilities in India. The duty hike could encourage them to increase local production, boosting their profit margins.


  • Global Gold Finding Exporters:
    • Italian jewelry finding manufacturers, known for their craftsmanship, could see reduced exports to India due to the increased import duty, impacting their sales and profits.
    • Chinese jewelry finding exporters may face a similar decline in demand from India, affecting their market share in the region.

Market Sentiment:

  • Indian jewelry sector: The news could lead to positive sentiment for Indian jewelry manufacturers and gold refining companies, with potential stock price increases due to optimistic growth prospects.
  • Jewelry importers and retailers: Negative sentiment is likely, with potential stock price dips due to concerns about reduced profitability and competitiveness.
  • Global gold finding manufacturers: Mixed sentiment, with potential gains for companies with existing local production facilities in India and losses for those reliant solely on exports.

Note: This analysis is based on the available information and is subject to change based on future developments. It is not intended as financial advice, and investors should conduct their own research before making any investment decisions.

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