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<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div><\/div>\n<\/div>\nNEW DELHI: Gold demand in India has slipped by nearly 70 per cent after the government doubled import duty on the precious metal earlier this month.The higher fuel and food prices linked to the ongoing Iran conflict had further dragged down the consumer sentiment.Industry estimates showed gold demand fell to around 7.5 tonnes in the fortnight ending May 27, compared with nearly 25 tonnes during the same period last year. The sharp slowdown came after the government raised the import duty on gold from 6 per cent to 15 per cent with effect from May 13, according to ET. According to the India Bullion & Jewellers Association (IBJA), jewellers across the country have reported a steep decline in purchases following the duty increase.“Reports trickling in from jewellers across India show that there has been a 70 per cent drop in demand after the import duty was hiked,” said Surendra Mehta, National Secretary of IBJA.He said the unorganised sector, which accounts for nearly 65 per cent of India’s gold trade has been among the worst affected by the higher duty.The effective tax burden on gold, including Goods and Services Tax (GST), has increased to 18.45 per cent from 9.18 per cent following the duty revision. The government introduced the measure amid a weakening rupee, elevated crude oil prices and geopolitical tensions while also tightening certain import rules.Industry executives said the duty hike has coincided with rising petrol, diesel and food prices, reducing consumers’ willingness to spend on discretionary purchases such as gold.“It is not only the high import duty that has dented demand,” said Joy Alukkas, Chairman of jewellery retailer Joyalukkas. He added that Prime Minister Narendra Modi’s appeal for people to avoid buying gold for a year had also affected sentiment.At Joyalukkas stores, demand has fallen by more than 35 per cent, according to the company.Mehta said gold is currently not a spending priority for many households. He also pointed to the ongoing Adhik Maas period, during which many Hindus traditionally avoid purchasing precious items.“What is more surprising is that even investment demand for gold has slowed down,” he said.<\/p>\nShift towards lighter jewellery<\/h2>\n<\/p>\n