This story is from May 21, 2016

Demand for gold jewellery in India down to 7-year low: Report

Gold jewellery sector in India is not shining as per the latest report published by World Gold Council (WGC) for the first quarter of 2016.
Demand for gold jewellery in India down to 7-year low: Report

Surat: Gold jewellery sector in India is not shining as per the latest report published by World Gold Council (WGC) for the first quarter of 2016.
The gold jewellery demand in India, according to WGC report, hit a seven-year low of 88.4 tonnes, a 41 per cent year-on-year decline in the first quarter of 2016. This is 44 per cent below the five-year quarterly average for India of 156.7 tonnes and indicates the extent of troubles faced by the market during the quarter, which included the month-long strike by the jewellers demanding abolition of 1 per cent excise duty levy.
According to the report, the sharp rise in the local gold prices through a number of key levels was discouraging in itself.
The anticipation of a correction in prices and of a reduction in customs duty on gold kept jewellery demand tepid in February.
However, the final blow came in the budget release on February 29 with Union finance minister proposing increase in customs on gold dore and one per cent levy of excise duty on jewellery articles.
The decision to impose excise duty led to widespread strike by jewellers. The jewellery showrooms, bullion traders and manufacturing units in most of the states across the country downed their shutters demanding rollback of excise duty. The strike continued for almost 40 days from March 1.

Sources said marriage season had already started by the end of March and that consumers were unable to buy jewellery at a time of such uncertainty. This, however, drastically reduced the demand for gold jewellery in the Indian market, thereby reflecting in the first quarter demand in 2016.
"It's not only gold jewellery, but diamond-studded jewellery segment also suffered due to the nation-wide strike for over 40 days. Now things have settled down and we hope for better business in the coming quarters," Gems and Jewellery Export Promotion Council (GJEPC) regional chairman Dinesh Navadiya said.
SGCCI's gems and jewellery committee chairman Nainesh Patchigar said, "Again the soaring gold price has become a big deterrent for gold jewellery consumers in India. The price volatility is keeping consumers away from doing heavy purchases of jewellery. The trend of low-budget jewellery is picking up where consumers are preferring 18 carat gold jewellery."
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About the Author
Melvyn Thomas

Melvyn Thomas is principal correspondent at The Times of India, Surat. He reports on the latest trends in the diamond and textile sectors. He also digs up special stories from the Surat Municipal Corporation and other government departments. He is a voracious consumer of films, books and music of all kinds. He is fascinated by the internet and follows all aspects of its development. He also dabbles in photography. He is both fascinated and repulsed by politics.

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