India’s organised gold jewellery retail sector to achieve 20-25 pc revenue growth this fiscal: Report

The Indian organised gold jewellery retail sector, comprising jewellery, coins and bars, is expected to record strong revenue growth of 20‑25% year‑on‑year in FY27, driven by higher realisations, even though volumes are likely to fall because of elevated gold prices and recent policy measures to curb imports of the metal, a new report showed on Friday.

Higher gold prices will raise inventory carrying costs and increase bank borrowing needs. Yet, a rise in revenues and cash inflows should counterbalance the greater debt dependence, keeping credit profiles steady, according to a Crisil report.

Nevertheless, the organised gold jewellery retail sector is projected to see its sales volume slip another 13‑15% YoY this fiscal, following an 8% drop last fiscal, due to high prices of gold and recent policy measures to curb imports of the metal.

In fiscal 2026, India imported 720 tonnes of gold, leading to foreign currency outflow of $72 billion.

Amid sustained high gold prices and as a measure to reduce the trade deficit and support the currency, the central government recently raised customs duty on gold.

“The central government’s decision to more than double the customs duty on gold to 15 per cent from 6 per cent will be a significant deterrent to demand for gold jewellery. While we see a notable shift towards gold bars and coins driven by investment demand, but that is unlikely to fully offset the decline in overall demand,” said Himank Sharma, Director, Crisil Ratings.

As a result, volume of the gold jewellery retail sector will decline 13-15 per cent on year to 620-640 tonnes this fiscal, a level not seen in the past decade, he mentioned.

Although the uptick in realisations will yield inventory gains for retailers, some of these gains may be passed on to customers in the form of deeper discounts to incentivize volume sales.

Additionally, increased promotional expenses and the trading of gold bars and coins will weigh on retailers’ gross margins, said the report.

Steep fluctuations in gold prices, further changes in regulations and import duty on gold, potential government restrictions on gold purchases, and changes in consumer sentiment will bear watching, it added.

(With inputs from IANS)