Gold industry seeks uniform gold rates across India

Srinagar, July 26: The gold jewellery industry has sought ‘one nation, one rate policy’ across the country, starting from Eastern India from August, officials said.

Keeping the recent spike in gold rates across the country, the stakeholders have shown interest in the idea of a unified gold rate across.

“We will begin with a single rate for Bengal and Eastern India from August, and have on boarded stakeholders for this initiative to keep rates contained,” Samar Kr De, President of the Swama Silpa Bachao Committee said.

However following Finance Minister Nirmala Sitharaman’s announcement of a reduction in gold customs duty during Budget 2024-25, customers have rushed to jewellery stores to take advantage of lower gold prices. This has led to a notable increase in demand for gold, particularly as the wedding season approaches.

Since the duty cut, customers in India, the world’s second-largest gold market, have flocked to jewellery stores to buy gold at reduced rates. Many are opting for heavier pieces of jewellery that were previously out of reach when gold prices hit a record high of Rs 74,000 per 10 grams.

Saiyam Mehra, Chairman All India Gem & Jewellery Domestic Council (GJC), said “The idea is to create a level playing field for all stakeholders and prevent undercutting”.

De said that they aim to extend the ‘One Gold Rate’ policy nationwide within the next six months and are in discussions with large national jewellery retail chains.

He also noted that the recent 9 per cent duty cut was unexpected by the industry.

“Gold smuggling is estimated to be 100 tonnes out of the total import of some 950 tonnes,” said Sunny Dholakia, a diamond importer.

However, there is a concern about whether the government has any other plan regarding the Goods and Services Tax (GST) concerning gold, according to industry sources.

The GJC has appealed to the GST Council to reduce the rate on jewellery from the current three per cent to one per cent.