India’s domestic gold jewellery industry to grow by 14-18% YoY in FY25

Despite a likely contraction in volume, the domestic gold jewellery industry is expected to grow by 14 to 18 per cent in value terms on a year-on-year (YoY) in the current financial year (FY25). And, rural India has a 60% share of the domestic jewellery demand, says a report by Icra.

This year, the favourable monsoon and higher crop sowing are anticipated to boost rural incomes, potentially leading to higher purchases. The growth momentum of the domestic gold jewellery industry is likely to remain strong this fiscal, after a sizable growth of around 18 per cent in the previous financial year, driven by the surge in demand after the sharp cut in customs duty with effect from 24 July 2024. Bar and coin demand in the second quarter of the current fiscal (Q2FY25) was the highest in more than a decade, leading to an overall rise in volume of around 43 per cent in H1FY25 on-year.

The average gold price in the country in FY25 so far is up by around 25 per cent compared to the average price in FY24, despite intermittent corrections, after the cut in customs duty by 9 per cent in late July 2024 and then in November 2024.