Expert Analysts Suggest Buying Opportunities in Indian Jewellery Stocks Following Import Curbs on Gold and Silver

Government's Import Duty Hike and Tighter Curbs on Gold and Silver Create Pressure on Jewellery Stocks

The recent hike in import duties and stricter regulations on gold and silver imports have put pressure on jewellery stocks in the near term. The government increased import duties on gold and silver from 6% to 15% in May 2026 to ease pressure on the country's forex reserves and narrow the trade deficit. Additionally, gold and silver imports were shifted from the "free" category to the "restricted" category, limiting gold imports under the advance authorisation scheme to 100 kg per licence. Exporters are now required to fulfil 50% of their export obligation before obtaining fresh approvals.

According to Seema Srivastava, Senior Research Analyst at SMC Global Securities, this move raises landed costs and could tighten physical supply, structurally benefiting large, organised jewellers over unorganised players and grey market operators. Companies with strong domestic sourcing, recycling networks, a high-studded mix, and export exposure are best placed, she added.

Impact on Jewellery Demand

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Jewellery demand in India behaves differently from many other industries, driven by weddings, festivals, and cultural preferences. Despite higher prices, demand tends to remain resilient. According to Ravi Singh, Chief Research Officer from Master Capital Services, purchases are often driven by consumer preferences, which means demand generally remains stable even when prices move higher.

In the long term, import curbs are meant to reduce the $71.98 billion gold and $12 billion silver import bill. However, past experiences have shown that duty hikes don't dent demand; volumes were stable even when duties rose to 10% in 2013. Investment demand now forms 40%+ of gold consumption, and higher prices could lift ETF premiums as physical supply tightens.

A World Gold Council report revealed that India's gold jewellery demand weakened in the first quarter as soaring gold prices hurt affordability. However, total spending touched a record high, reflecting strong underlying consumer appetite. Jewellery demand volumes fell 19% year-on-year (YoY) to 66 tonnes, mainly due to an 81% annual jump in domestic gold prices. Meanwhile, value demand climbed 47% YoY to an all-time high of ₹999 billion (around $11 billion), indicating increased consumer spending despite lower purchase volumes.

Impact of Import Restrictions on Gold and Silver Prices

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The import restrictions and duties resulted in a 6 - 8% jump in gold and silver prices, indicating immediate pass-through of higher import costs. A rise in Custom Duty increases the price of precious metal, and import restriction raises concerns on supply, leading to discount compression or higher premium.

On Tuesday, MCX gold June futures edged up 0.17% to ₹1,59,674 per 10 grams, while MCX silver July futures slipped 0.30% to ₹2,75,824 per kg.

Which Jewellery Stocks to Buy?

Ravi Singh of Master Capital Services believes that quality businesses still appear more attractive than chasing short-term momentum from an investment point of view. Investors may be better off looking at companies with strong execution and steady growth potential rather than reacting only to near-term policy changes.

Seema Srivastava of SMC Global said that near-term margins may face pressure from higher gold costs and working capital, but long-term prospects improve as compliance costs eliminate smaller rivals and listed players gain market share. She recommends accumulating quality names like Titan on dips, while midcaps like Kalyan and Senco offer higher risk-reward if execution holds.

Titan remains the quality franchise with ~35% studded share, Tata backing, and Tanishq's brand allowing pricing power to pass on duty impact. Kalyan Jewellers and Thangamayil Jewellery have deep south India networks and improving balance sheets, and any shift of demand from unorganised to organised players due to supply curbs helps them gain share. Senco Gold and Sky Gold, with export-oriented models and diamond studded focus, benefit because exporters under SEZ/EOU/Advance Authorisation are exempt from restrictions, protecting their raw material access.