The recent cut in gold import duties from 15 per cent to 6 per cent is anticipated to lead to a notable rise in gold purchases nationwide.
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Mumbai: The recent cut in gold import duties from 15 per cent to 6 per cent is anticipated to lead to a notable rise in gold purchases nationwide, especially during the upcoming festive and wedding seasons.
According to a report by PL Capital–Prabhudas Lilladher, one of the financial services organisations in India, given the gold's cultural and religious importance, along with its status as a valuable investment, this reduction is expected to significantly boost demand.
In the report Band, Baaja, Baaraat & Markets, it was pointed out that the Indian stock market frequently sees a boost during the festive and wedding seasons, largely driven by heightened consumer spending.
Sectors such as retail, hospitality, jewellery, and automobiles see substantial benefits from this increased demand.
"Contributing factors include economic stability, low inflation, supportive government policies, and evolving consumer preferences. While the impact may differ across sectors, the overall effect on the Indian economy is positive. Higher spending on premium goods and services, such as airlines and hotels, boosts revenue. This increased demand enhances profit margins and drives stock prices higher, supporting overall economic growth,” according to the report.
India conducts approximately 10 million weddings each year, making its wedding industry the second largest in the world.
In 2024, from January 15 to July 15, the industry has already seen more than 4.2 million weddings, resulting in an estimated expenditure of $66.4 billion (Rs 5.5 lakh crore), according to a survey by the Confederation of All India Traders (CAIT).
The government plans to enhance tourism by promoting India as a top choice for international weddings.
The initiative will begin by highlighting around 25 key destinations across the country, demonstrating how India can cater to various wedding preferences. Building on the success of the Make in India campaign, this strategy aims to capture approximately $12.1 billion (Rs 1 lakh crore) that is currently spent on destination weddings overseas.