Gold Crashes 24% Globally But Just 20% In India, Why Are Domestic Buyers Missing The Full Price Relief?

Mumbai: Global gold prices have plunged 24 percent from their January record highs, but Indian consumers have witnessed a smaller 20 percent correction. Higher import duties, a weaker rupee and changing domestic premiums have prevented buyers from enjoying the full benefit of falling international bullion prices.

Global Vs Domestic Prices

International spot gold declined from USD 5,379 an ounce on 29 January to USD 4,068.71 on 6 November.

Meanwhile, 99.9 percent pure gold in Delhi dropped from its January peak of Rs 1,83,000 to Rs 1,46,300 per 10 grams on Dhanteras, according to the All India Sarafa Association.

The difference reflects several domestic pricing factors.

Import Duty Impact

The government increased effective gold import duty from 6 percent to 15 percent on 13 May, comprising 10 percent basic customs duty and 5 percent Agriculture Infrastructure and Development Cess.

This increased import costs, limiting the benefit of cheaper international bullion.

Consumers additionally pay 3 percent GST and applicable jewellery-making charges.

Weaker Rupee Effect

Currency depreciation has further restricted domestic price declines.

The rupee weakened from approximately Rs 92 against the dollar in January to Rs 93.905 on 6 November.

Since India imports gold priced in dollars, a weaker currency increases its landed cost, partly offsetting international price reductions.

Premiums Shape Correction

Domestic bullion premiums also influenced the price movement.

Ahead of the Union Budget, traders charged premiums reaching USD 112 an ounce amid expectations of higher import duties.

However, following May's duty increase, dealers offered discounts reaching USD 207 an ounce as demand weakened.

By October, premiums had largely normalised, contributing to the domestic correction.

What Buyers Face?

Despite falling prices, Delhi gold remained approximately 10 percent costlier than last Dhanteras, when it traded at Rs 1,32,400 per 10 grams.

The World Gold Council expects Indian demand to decline to around 650 tonnes in 2026, potentially the lowest since 2020.

For consumers, import duties, currency fluctuations and dealer premiums remain crucial alongside international bullion prices.

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