The recent drop in gold prices is also expected to help sales although prices remain elevated.
“Seasonal gold demand is gaining traction as the market enters the key festive and wedding period. 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,” said a recent report by the World Gold Council (WGC).
Alongside increased marketing and promotional activity, jewellers have focused on fresh designs and lighter weight pieces, which offer greater wearability, said the WGC’s India gold market update, adding that old-gold exchange remains an important feature of the market. Bar and coin demand has moderated.
Surendra Mehta, National Secretary, Indian Bullion and Jewellers Association however said that demand has remained weak and there was a 7-10% drop in purchases this Dussehra compared to last year. He does not expect sales in Diwali to be much better.
“Most of the spending is on low carat jewellery and on light weight jewellery. Demand for gold has dropped,” he said, adding that people are not willing to spend money on gold. There is also fear that prices will fall further, he said, adding that a lot of recycled gold has entered the market, which has led to a drop in gold imports.
Official data from the commerce ministry had revealed that gold and silver imports fell substantially in September with commerce secretary Rajesh Agarwal attributing it in part to the higher import duties. India imported gold worth $1.8 billion in September 2026 as against $9.61 billion in September 2025.
Meanwhile, in August 2026, gold imports had nearly halved to $2.3 billion from $5.44 billion in August last year. In the first half of the fiscal year, India’s gold imports dropped 27.32% to $19.27 billion from $26.51 billion a year ago.
Gupta of GJC attributed the decline in gold and silver imports in September to multiple factors including the higher import duty as well as the shraadh period. Industry trends indicate that gold and silver imports have remained muted in October.
“This sharp decline, despite the approaching festive season, likely reflects greater availability of domestic supply, including recycled gold generated through old-gold exchange programmes,” the WGC report said.
There are also concerns about rising smuggling of gold. The Directorate of Revenue Intelligence (DRI) has over the last few weeks caught several syndicates involved in smuggling of the yellow metal.