Gold Share Crash: Kalyan Jewellers, Titan And Senco Gold Stocks Sink After Government Raises Import Duty

Jewellery company shares witnessed heavy selling on Wednesday after the government sharply increased import duties on gold and silver from 6 percent to 15 percent.

The decision triggered panic selling across the jewellery sector, with stocks such as Kalyan Jewellers India, Senco Gold, Titan Company and Sky Gold and Diamonds falling sharply during trading.

Some jewellery stocks dropped by as much as 11 percent as investors worried that higher gold prices could reduce consumer demand.

Why Jewellery Stocks Are Falling

The government announced the import duty hike as part of broader measures to reduce India's rising import bill during the ongoing West Asia crisis.

India imports a large portion of its gold and silver requirements, and any increase in import duties directly pushes domestic prices higher.

According to the Finance Ministry notification, the government increased:

• Social Welfare Surcharge (SWS)
• Agriculture Infrastructure and Development Cess (AIDC)
• The revised duties came into effect from May 13.

The move comes at a time when global crude oil prices are also rising sharply due to tensions in West Asia, increasing pressure on India's economy and foreign exchange reserves.

PM Modi's Appeal Added To Market Pressure

The latest fall in jewellery stocks also comes days after Prime Minister Narendra Modi appealed to people to reduce non-essential gold purchases.
During a recent speech, PM Modi urged citizens to conserve foreign exchange and avoid unnecessary spending amid global economic uncertainty.

His comments triggered concerns that demand for jewellery could weaken in the coming months, especially during wedding and festive seasons.

Sky Gold And Diamonds Crashes Over 11%

Among the worst-hit counters was Sky Gold and Diamonds.
The stock plunged 11.11 percent during the trading session.
It opened lower at Rs 456.95, down 3.87 percent from its previous close, and later slipped further to touch an intraday low of Rs 422.50.

The stock has now declined nearly 19 percent over the last three trading sessions.

Kalyan Jewellers Hits Fresh 52-Week Low

Shares of Kalyan Jewellers India also witnessed heavy selling pressure.
The stock opened at Rs 346.25, down 4.34 percent from its previous closing level of Rs 361.95 on the BSE.

During intraday trading, the stock fell further to Rs 340.10, marking a fresh 52-week low.
For comparison, the stock's 52-week high stood at Rs 617.30.

Analysts believe investors are worried that rising gold prices may impact jewellery demand and company earnings.

Senco Gold Witnesses Volatility

Senco Gold shares also came under pressure.
The stock opened with a loss of 4.3 percent at Rs 299.20 compared to its previous close of Rs 312.65.

However, the stock later recovered partially and touched an intraday high of Rs 328.70 before witnessing further fluctuations.

Titan Company Trades Lower

Shares of Titan Company also traded in the red after the import duty hike announcement.
The stock opened at Rs 4,043.95, slightly lower than its previous closing price of Rs 4,054.05.

It later fell to an intraday low of Rs 3,987.55 before rebounding to Rs 4,110.60 during the session.

Titan's jewellery business remains closely linked to gold prices and consumer purchasing trends through its Tanishq brand.

Experts Say Prices Have Been "Re-Priced"

Despite the sharp rise in gold and silver prices, market experts believe the increase is mainly due to a "mechanical re-pricing" effect rather than strong buying demand.
When import duties rise suddenly, the domestic price of precious metals automatically increases because imported gold becomes more expensive.

Experts say this is not necessarily a sign of stronger investment demand in gold.

India's Heavy Dependence On Gold Imports

India is currently the world's second-largest consumer of gold after China.
The jewellery industry remains one of the biggest drivers of gold imports in the country.

Any increase in import duties directly affects:

• Jewellery prices
• Consumer demand
• Retail sales
• Wedding season purchases
• Investor sentiment

This is why jewellery stocks often react sharply to changes in gold import policies.

Concerns Over Future Demand

Investors now fear that expensive gold prices may reduce buying activity during upcoming festive and wedding seasons.

Higher jewellery prices could affect middle-class consumers the most, especially at a time when households are already dealing with inflationary pressure.
Analysts say jewellery companies may continue facing volatility if gold prices remain elevated.

Government Focused On Reducing Import Bill

The government's latest decision is part of a broader effort to reduce pressure on India's foreign exchange reserves during global economic uncertainty.
India's import bill has increased significantly due to rising crude oil prices linked to geopolitical tensions in West Asia.

Officials believe reducing imports of non-essential luxury items like gold can help ease economic pressure.

Investors Watching Global Developments Closely

Market participants are now closely monitoring:

• Global crude oil prices
• West Asia tensions
• Future government policy measures
• Domestic jewellery demand
• Gold price movement

For now, the jewellery sector remains under pressure as investors assess the long-term impact of rising import duties and weaker demand expectations.