Titan, jewellery stocks tank as govt increases import duty on gold to 12.5%

New Delhi: Shares of jewellery makers and gold companies were under pressure on Friday as the government increased import duty on the yellow metal.

The government of India has increased the import duty on the yellow metal to 12.5 per cent from 7.5 per cent earlier, which means the gold companies will have to pay more to import the yellow metal.


The move has been taken to keep a check on the current account deficit (CAD) and rising import of the yellow metal. The duty changes come into effect from June 30.

Following the development, shares of Titan Company plunged as much as 6 per cent to Rs 1,827.15 in Friday's trade before recovering to Rs 1,890.75 at 12.20 pm.

Titan shares have underperformed in 2022 so far. The scrip is down by 25 per cent in the first half of the year. From an all-time high, it has wiped off more than one-third of investors' wealth.

Other key players, including Tribhovandas Bhimji Zaveri (TBZ), Vaibhav Global, Thangamayil Jewellery and Kalyan Jewellers Indian tumbled 2-4 per cent.

Other smaller listed jewellery firms including Goldiam International, Radhika Jeweltech, Veeram Securities and Banaras Beads were trading marginally lower.

"There has been a sudden surge in import of gold. In the month of May, a total of 107 tonnes of gold was imported and in June also the imports have been significant. The surge in gold imports is putting pressure on the current account deficit," the ministry said.

India’s gold purchases had been increasing since last year after buying declined during the pandemic. The World Gold Council reports that India's gold imports reached their highest level in ten years in 2021.

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