- Markets closed due to lockdown in major cities of the country including Mumbai
- India was the second largest consumer of gold in the world, selling 690 tonnes of gold last year.
Due to coronavirus, gold sales in the country may be the lowest in 25 years this year. Sales are projected to decline 30% this year. Demand is already low due to the rise in gold prices in the last few months. As the impact of coronavirus increases, the market situation has worsened with the lockdown in most areas of the country. The country’s GDP growth in the current financial year is also estimated to be the lowest in 11 years.
In the last 25 years, the lowest 477 tonnes of gold was sold in 1995.
According to Inventiva’s report, Ananta Padmanabhan, chairman of the All India Gem and Jewelery Domestic Council, said 690 tonnes of gold was sold last year. But, sales are projected to decline by 30% this year. This means 483 tonnes of gold will be sold this year. If this happens, it will be the lowest sale in 25 years. Less than 477 tonnes of gold was sold in 1995.
Gold demand expected to decline by 40% in next few weeks
Shopping malls and complexes in major cities of the country are closed due to coronavirus. Titan, the country’s largest jeweler by market value, has closed its stores and manufacturing units till 29 March. Even after this, a decision will be taken in view of the situation. Zaveri Bazaar, the country’s largest bullion market in Mumbai, is also closed till further orders. According to Prithviraj Kothari, president of the India Bullion and Jewelers Association, gold demand may fall by 40% in the coming weeks in such conditions.
Industry demand – import duty on gold be reduced to 4%
The Gem and Jewelry Export Promotion Council and other industry organizations are looking for ways to help small workers in the sector. Because, if the circumstances of the lockdown are prolonged, then the employment of daily workers will be lost. The industry is demanding more time for debt repayment and to reduce import duty on gold from 12.5% to 4%.