Why Kalyan Jewellers, Senco Gold and Other Jewellery Stocks Fell After Gold Import Duty Hike

Jewellery stocks fell sharply on Wednesday after the Finance Ministry hiked import duty on gold and silver overnight. Kalyan Jewellers declined 4.33%, Titan slipped 0.43%, Senco Gold fell 0.19% and PC Jeweller dropped 0.94%. The government revised gold and silver import duty effective May 13: Earlier → 6% Now → 15% (10% basic customs duty + 5% AIDC) Gold and silver imports just became 2.5x more expensive overnight. Jewellery companies depend on imported gold and silver as their core raw material. When import duty jumps: Costs rise → Higher duty means higher production costs, squeezing profit margins directly. Demand may slow → Costlier gold means higher jewellery prices for consumers, potentially reducing purchases. To curb non-essential imports and conserve foreign exchange reserves the same reason PM Modi urged citizens to avoid unnecessary gold purchases this week. Any rollback in duty or cooling of global gold prices could quickly reverse pressure on jewellery stocks. Watch for festive season demand data too. The fall in Kalyan Jewellers, Senco Gold and Titan stocks after the gold import duty hike teaches investors that sudden government policy changes on raw material costs can instantly hurt an entire sector's profitability, making it essential to track both commodity prices and import duty announcements before investing in jewellery stocks.