A 9% increase in import duties has created a rare $150 per ounce discount as prices adjust with a lag amid weak demand.
India’s gold market is trading at a near $150 per ounce discount to official landed prices after a 9% import duty hike. The increase has not fully passed through to domestic prices due to a lag in adjustment and subdued demand.
Prices have risen 4%-6% since the duty was imposed, below the 9% tax increase. Previous hikes in 2019 and 2022 also caused discounts, but this episode is more pronounced due to the duty’s scale and timing during a seasonally weak period.
Demand has weakened post-wedding season, with ample supply from old jewelry exchanges and front-loaded imports before the duty change.