Gold ETF shares dipped 2% in early trade, mirroring a 0.8% slide in the underlying gold index that closed at 67,450 points.
September saw gold imports plunge 81.27% to $1.8 billion, the steepest decline since 2022. The drop follows a May 13 duty hike from 6% to 15%, a move aimed at curbing domestic consumption amid geopolitical tensions.
Gold, which makes up over 5% of India's import basket, is a major driver of the country’s current account deficit. The slump in imports could lift the deficit by a few hundred crore rupees, though export growth offsets some impact.
Analysts from Motilal Oswal note that the duty increase may dampen jewellery demand, potentially easing downward pressure on gold prices. They project that if import flows stabilize, gold ETFs could see a modest rebound in the next quarter.