Consumers tighten casual buying; jewellers report sharp fall in footfall

Mysore/Mysuru: Prime Minister Narendra Modi’s call for austerity and the recent hike in import duty on gold by the Central Government appears to have impacted consumer spending on gold, with jewellers in Mysuru reporting a sharp decline in sales over the past week.

Known for its large number of jewellery showrooms and established gold brands, Mysuru has witnessed a noticeable drop in customer footfall, with traders estimating nearly a 40 percent fall in sales, in terms of quantity.

Gold, traditionally seen as a symbol of financial security and an essential part of weddings and festivals, has become increasingly expensive in recent months, prompting many customers to limit their purchases.

Speaking to SOM, Shroff Varthakara Sangha (Association of Jewellers in Mysuru) President Adarsh K. Murthy of A. Shankara Chetty & Sons said, combined effect of rising prices and the PM’s austerity appeal had affected market significantly.

“There has been a sharp drop of nearly 40 percent in sales. Customers are continuing with essential purchases, but secondary and casual buying has reduced considerably. Earlier, people bought gold based on weight, but now purchases are restricted to a fixed budget. At the same time, people’s income levels are not keeping pace with soaring gold prices,” Shroff Varthakara Sangha President Adarsh K. Murthy said.

He pointed out that the price of 22-carat gold, which was around Rs. 6,900 per gram last year, has now risen to Rs. 14,385 per gram.

Hike in import duty

Adding to the pressure on the industry, the Central Government recently increased import duty on gold and silver to 15 percent from the earlier 6 percent and tightened norms under the Advance Authorisation (AA) scheme by capping duty-free imports at 100 kg per licence.

Jewellers in Mysuru said, they were also discouraging the purchase of gold bullion, such as coins and bars, in line with the ‘Nation First’ appeal.

Shroff Varthakara Sangha Vice-President T.A. Harsha Nandana Tholasi (Partner of Tholasi Jewels, Mysuru), said that customers were instead being encouraged to exchange old gold for new jewellery.

Recycling old gold

“Affordability has reduced considerably. We are advising customers to recycle old gold instead of buying coins and bars. We hope the situation will stabilise within a month. Our National Association has also submitted a representation to the Central Government seeking measures to address the issue,” he said.

Meanwhile, some major jewellery chains across the country are reportedly planning to reduce fresh gold imports during the current financial year and instead promote the reuse and circulation of idle gold.

An official from a leading jewellery chain said, casual purchases had declined, though overall sales were only marginally affected. “In line with the Prime Minister’s austerity appeal, we are focusing more on recycling idle gold by redesigning and refurbishing old jewellery for resale,” the official said.