The Union Budget 2024 presented on July 23 brought significant changes to the customs duties on precious metals. Finance Minister Nirmala Sitharaman announced a reduction in customs duties for gold, silver, and platinum. This decision is taken to make jewelry made from these metals more affordable. Therefore the gold and silver prices drop have made them more affordable for people.
The customs duty on gold and silver has been lowered to 6%. Previously, it was 15%. For platinum the customs duty is now 6.4% which is downgraded from 15.4%. This reduction is expected to result in gold and silver prices drop.
Expected Price Drops
According to an Economic Times report, the price of 24-carat gold will drop by ₹2,800. Currently, it is priced at ₹72,700 per 10 grams. Silver will see a price cut of ₹1,650 per kg bringing it down to ₹87,350 per kg. Platinum prices are also expected to decrease therefore costing ₹28,940 per 10 grams.
The announcement has already started affecting the market. Some manufacturers have begun passing on the duty cuts to customers. Surat-based silver articles maker Mahesh Rungta noted that silver prices have already started to fall.
Stock Market Reaction
The stock market responded positively to the news. Shares of gold and jewelry companies saw an increase. Kalyan Jewellers India Ltd rose by 5.15%, trading at ₹581.30 on the BSE. Tribhovandas Bhimji Zaveri Ltd went up by 2.03%, trading at ₹158.45. Titan Company Limited Ltd increased by 1.24%, trading at ₹3,511.15. Rajesh Exports Ltd saw a rise of 2.47%, trading at ₹324.15. Senco Gold Ltd also saw a slight increase of 0.23%, trading at ₹989.85.
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What Officials Have To Say?
“To enhance domestic value addition in gold and precious metal jewellery in the country, I propose to reduce customs duties on gold and silver to 6 per cent and that on platinum to 6.4 per cent,” said the Finance Minister in his speech.
“Budget 2024 has proposed a cut in custom duty from 15% to 6%, leading to a correction of more than 4000-points in prices and the same should reflect in the domestic prices as well. It is positive for retail customers, as the effect will be immediate,” says Pranav Mer, Vice President, EBG.
“Gold in India is more than just a precious metal. Indian consumers have an emotional connect with the yellow metal, the significance of which comes to the fore on special occasions. Given this cultural context, today’s development in the union budget of a reduction in duty on gold to 6% is a welcome move, one which is expected to drive down retail price of the metal. This in turn is expected to set off a virtuous cycle of increased consumption and contribute substantially to the exchequer and fand facilitate the growth of India as a precious metals hub,” says Vikas Singh, Managing Director & CEO of MMTC-PAMP.
What Impact Will It Have On Indian Economy?
The Gold and Silver prices drop will have a positive impact on the Indian economy. The reduction in the prices will make gold more easily purchasable for the Indians which will increase the demand for the gold. Moreover, more people will now be saving more gold as part of their wealth instead of saving money. This will allow the gold business to earn more profits therefore the government will be able to take more corporate tax from the business.
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