India's Gold Demand Falls 6% Amid Higher Prices and Customs Duty

India's gold demand fell by 6% year-over-year to 131.4 tonnes during the April-June quarter, according to the World Gold Council (WGC). Despite the decline in volumes, consumers spent a record Rs 1.98 lakh crore on gold, reflecting their willingness to purchase even at elevated prices.

The slowdown was driven by higher prices, increased customs duty, and a subdued buying season, said WGC Regional CEO (India) Sachin Jain. Jewellery demand fell 15% to 75.1 tonnes, while investment demand remained resilient.

Demand for gold bars and coins rose 9% to 50.3 tonnes, with Indian Gold ETFs recording net inflows of 4.2 tonnes despite global ETFs witnessing outflows. The WGC expressed concern over the possible rise in gold smuggling following the customs duty hike, describing illicit trade as one of the biggest risks facing the industry.