Purchases of gold in India slumped in the first quarter as jewellers went on a prolonged strike in protest of a new tax.
Gold demand in India declined by 39 per cent to 117 tonnes in the first three months of the year compared with the same period a year earlier, according to figures from the World Gold Council.
“The jewellers’ strike following the reintroduction of an excise duty, which left even wedding shoppers affected, was one major reason impacting demand,” said Somasundaram PR, the managing director for India at the World Gold Council. “The sharp increase in the price of gold since the beginning of the year and an expectation of a cut in the customs duty on gold also led consumers to hold back on purchases.”
Jewellers across India went on strike and organised protests after Arun Jaitley, India’s finance minister, in his union budget at the end of February announced the reintroduction of a 1 per cent excise duty on gold jewellery. Jewellers opposed this because they said they were concerned they would be harassed by the excise department, which would demand detailed accounts to be kept for individual pieces of jewellery. They ended the strike in mid-April but their demands to roll back the tax were not met. Kumar Jain, a jeweller in Zaveri Bazaar, a hub for jewellery shops in south Mumbai, went on strike with the majority of his fellow jewellers in the market, and was disappointed that the decision was not reversed after he went on strike for 45 days.
“The strike ended with our surrender,” he said. Jewellers have been given until July 1 to register with the excise department.
business@thenational.ae
Follow The National's Business section on Twitter
