Golden Boom: Jewellery Consumption Set to Shine in FY25

Domestic gold jewellery consumption in India is projected to grow by 14-18% in FY25, driven by favorable market conditions and a reduction in import duty. Despite price volatility, consumer sentiment and festive demand have boosted growth. Organised players plan to expand their retail network.

India's domestic gold jewellery market is poised for robust growth, with an estimated rise in consumption value by 14-18% in FY25, according to a recent Icra report. This growth, driven primarily by favourable realisations, follows an 18% increase in 2023-24.

Factors such as volatile gold prices, enhanced consumer sentiments, and an increase in auspicious occasions are expected to bolster demand. The Union Budget's 900 basis point cut in import duty has temporarily corrected gold prices, encouraging pre-buying of jewellery, bars, and coins in the typically weak second quarter of FY25.

The organised sector is projected to grow by 18-20%, capitalising on rising gold prices, and expanding into tier II and III cities. Despite expected contraction in industry operating margins, organised jewellers are focusing on the franchise model for network expansion, maintaining stable debt protection metrics.

(With inputs from agencies.)