Finance Minister Nirmala Sitharaman announced a significant cut in customs duty on precious metals such as gold, silver, and platinum in the Union Budget 2024 presented on July 23. This move is set to make jewellery made from these metals more affordable for consumers. The basic customs duty (BCD) on gold and silver has been reduced to 6% from 15%, and the duty on platinum has been lowered to 6.4% from 15.4%.
As a result of these changes, the prices of these precious metals will decrease significantly. According to an Economic Times report, 24-carat gold will become cheaper by ₹2,800, bringing the price down to ₹72,700 per 10 grams. Silver prices will drop by ₹1,650 to ₹87,350 per kilogram, and platinum is expected to cost ₹28,940 per 10 grams. Several manufacturers have already started passing on these savings to customers. For instance, Surat-based silver articles maker Mahesh Rungta noted that silver prices have already been reduced.
The impact of the new duty cuts is expected to be substantial. MP Ahammed, Chairman of Malabar Gold & Diamonds, mentioned that the reduction in import duty on gold will not only benefit consumers but also boost gold demand and create jobs for artisans. He pointed out that high import duties often lead to increased smuggling of gold, which hampers the growth of the organized retail gold trade and results in revenue losses for the government. The duty cut is expected to curb smuggling and bolster the organized retail sector.
The stock market has reacted positively to the announcement. Shares of gold and jewellery companies have seen an uptick since the news broke. Kalyan Jewellers India Ltd is up 5.15%, trading at ₹581.30 on the BSE. Tribhovandas Bhimji Zaveri Ltd is up 2.03%, trading at ₹158.45. Titan Company Limited Ltd has increased by 1.24%, trading at ₹3,511.15. Rajesh Exports Ltd is up 2.47%, trading at ₹324.15, and Senco Gold Ltd is up 0.23%, trading at ₹989.85.