Indian jewellers are bracing for a strong festive season, with expectations of robust sales for Dhanteras and Diwali, even as official data shows a substantial decline in gold and silver imports. Industry players attribute the anticipated boost to recent drops in gold prices and a significant increase in the exchange of old gold.
Festive Demand Gains Traction Amid Price Adjustments
Seasonal gold demand is reportedly gaining momentum as India enters its key festive and wedding period. While gold prices remain elevated, a recent decline has provided crucial support for consumer interest. Manufacturers are observing healthy order flows as retailers replenish inventories, and in-store footfall is improving.
Avinash Gupta, Vice Chairman of the All India Gem And Jewellery Domestic Council (GJC), noted a shift in consumer behavior. "Sales had been down, but we are expecting a good festival season in October. Exchange of gold, which was traditionally at about 30% of gold purchases, is now seen at about 50%," he stated.
Imports Plummet Due to Duties and Recycled Gold
The sharp fall in gold imports in September and October 2026 has been attributed to several factors. High import duties, coupled with muted demand during the 'shraadh' period, played a role. Official commerce ministry data revealed that India imported gold worth $1.8 billion in September 2026, a drastic reduction from $9.61 billion in September 2025. For the first half of the fiscal year, gold imports dropped 27.32% to $19.27 billion.
The World Gold Council (WGC) noted that this decline, despite the approaching festive season, likely reflects a greater availability of domestic supply, particularly recycled gold generated through old-gold exchange programs.
"The recent decline in gold prices has provided some support to demand. Manufacturers are reporting healthy order flows as retailers replenish inventories to meet this seasonal demand, while industry feedback points to improving in-store footfall," stated a World Gold Council report.
Jewellers have also focused on fresh designs and lighter weight pieces to appeal to modern consumers, enhancing wearability and market appeal. Bar and coin demand, however, has moderated.
Mixed Outlook and Smuggling Concerns
Despite the overall optimism, not all industry figures share the same positive outlook. Surendra Mehta, National Secretary of the Indian Bullion and Jewellers Association (IBJA), reported a 7-10% drop in purchases this Dussehra compared to the previous year, expressing doubts about a significant improvement for Diwali. He highlighted that most spending is on lower-carat and lightweight jewellery, indicating a general reluctance to spend heavily on gold, partly due to fears of further price drops and the influx of recycled gold.
Adding to market complexities are concerns about rising gold smuggling. The Directorate of Revenue Intelligence has recently intercepted several syndicates involved in illicit trade of the yellow metal, underscoring the challenges faced by the legitimate gold market.