Gold Jewellery: India Cuts Import Duties to Boast Sales

This year, in its annual Union Budget, India announced a reduction on duties on the import of gold jewellery from 25% to 20%, and on some platinum jewellery components from 25% to 5%, starting February 2025. Last year, India reduced duties on imports of gold bars and coins (excluding jewellery) from 15% to 6%, the lowest duties in nearly a decade, benefiting local jewellery manufacturers. Notably, Switzerland is the single largest exporter of gold to India.

In 2024, India’s gold jewellery demand was about 563 tonnes, much higher than mainland China’s 479 tonnes. In fact, India outperformed not just China but also the greater China region comprising China, Hong Kong and Taiwan that collectively saw a demand of 511 tonnes in gold jewellery last year. Although India topped the global charts in 2024, the demand was 2% lower than 2023. Globally, annual consumption of gold jewellery also dropped by 11%.

Another notable announcement made in India’s Union Budget 2025 for the luxury industry is the reduction of import duties on motorbikes. For CBU (completely built units) of motorbikes with engine capacity 1600cc or less, the import duties are reduced from 50% to 40%, while bikes above 1600cc capacity get a bigger tax reduction from 50% to 30%. A move that could benefit the sales of Harley Davidson in India. US President Donald Trump had criticised India for levying high taxes on bikes such as Harley Davidson, during his previous term.

India has reduced basic import duties on CBU luxury cars priced at $40,000 and above from 100% to 70%. However, several other import tariffs levied on CBU cars in India were simultaneously increased, thus offsetting the reduction in basic import duties. Effectively, India has only restructured import duties on CBU luxury cars. The cumulative import duties remain unchanged. Luxury car manufacturers such as BMW and Mercedes have been assembling and producing cars in India for several years to avoid the high import duties levied on CBUs to cater to the country's growing demand for luxury vehicles with competitive pricing.