According to the World Gold Council (WGC), India’s gold demand in calendar year 2026 is likely to decline by 50-60 tonnes or about 10 per cent compared to the previous year, following the recent increase in import duties, PTI reported. In its India gold market update, the WGC said: “Looking at 2026 holistically, we estimate that combined demand for jewelery and bars and coins could decline by about 50-60 tonnes due to the impact of import duty increases, which is about 10 per cent lower than last year.” Gold import duty was increased from 6 percent to 15 percent, making it the largest increase on record and completely reversing the cut announced in July 2024. Prime Minister Narendra Modi has also appealed to consumers to avoid buying gold for a year. The WGC said annual demand will also be influenced by factors including gold prices, income levels, inflation and monsoon conditions. “Our econometric models suggest that import duty changes impact gold demand in the short and long term, although the impact varies across jewelery and investment products such as bars and coins. Investment demand appears to be more sensitive to duty changes, while jewelery demand is shown to be more resilient,” the WGC said. According to the Council, jewelery consumption is more affected by prices and inflation and less affected by changes in import duties, partly because purchases are often associated with weddings and social occasions. However, investment demand responds more sharply to income levels, duties and restrictions, while inflation and rainfall patterns can also influence purchasing trends in the short term. The WGC also pointed to a historical link between higher import duties and informal gold inflows. It said duty increases between 2013 and 2026 generally led to higher levels of smuggled gold, while duty cuts were accompanied by sharp declines in such flows. Following a 4 percent duty increase in 2013, informal imports rose sharply from about 10 tonnes in the first quarter of that year to 70 tonnes in the same period of 2014, a sevenfold increase in less than a year. The council said informal influx remained high even when tariffs remained unchanged, showing that trafficking networks are difficult to dismantle once established. A similar trend was seen after the increase in import duty from 10.75 percent to 15 percent in July 2022. However, after the duty cut to 6 percent in July 2024, informal imports fell to zero levels almost immediately, the WGC said