India gold demand rises despite government efforts to curb imports

Despite pleas from Prime Minister Narendra Modi to curb gold purchases to manage the national trade deficit, gold demand in India remains high. The Titan Company reported a 63 percent profit increase in the second quarter, driven largely by jewelry sales.

India faces significant economic pressure as its merchandise trade deficit rose to over $330 billion for the financial year ending March 2026, a 17.9 percent increase from the previous year. This deficit, alongside rising oil prices, has placed downward pressure on the rupee. To mitigate these costs, the government increased customs duties on gold from 6 to 15 percent in May.

However, the impact of these measures appears limited. Gold imports doubled in July, rising to an estimated 40-45 tonnes from 20 tonnes in June. The World Gold Council noted improving jewelry demand, as consumers continue to view gold as a vital store of asset value.