A woman stands near gold necklaces on display | Dhiraj Singh | Bloomberg
Text Size:

Mumbai: India’s festival of lights is bringing little cheer to jewelers in the world’s second-biggest gold consumer.

With less than a month to go before the Hindu festival of Diwali, a period when gold purchases typically peak, jewelers are lining up promotions to get buyers through the door as a rally in prices coincides with a collapse in consumer demand for everything from 7-cent cookies to cars.

Gold has soared in 2019, hitting a six-year high in dollar terms, as investors fret about the impact of the trade war, central banks cut rates and exchange-traded fund holdings surge. In India, where prices hit a record in September, the rally comes as the country’s growth slows, unemployment rises and a crisis of confidence engulfs the banking system. Its imports fell for a third month in September to the lowest in more than three years as jewelers cut purchases.

“Buying of gold during festivals and wearing it has been our tradition for decades,” according to Manish Kotekar, a 28-year-old taxi driver in Mumbai. “We have been waiting for prices to drop before buying gold as the rates are too high,” and if prices don’t go down below current levels by Diwali, “we may not buy this year. It is just not within our budget to buy at these prices.”

Benchmark gold futures in Mumbai touched an all-time high of 39,885 rupees ($561) per 10 grams in early September and while prices have come off about 4% since that peak, they’re still more than 20% higher than last year. Diwali falls on Oct. 27 and is preceded by Dhanteras, the most auspicious day in the Hindu calendar to buy gold.

“Diwali is just a festival on the calendar this year and there is no festivity for jewelers in the market at all. It’s very bad,” Ketan Shroff, a director at Mumbai-based jeweler Penta Gold Pvt. and a former joint secretary of the India Bullion and Jewellers Association Ltd., said by phone. Companies are giving deep discounts “because there are no customers.”

Also read: Global economic slowdown effects more pronounced in countries like India: IMF chief

We are deeply grateful to our readers & viewers for their time, trust and subscriptions.

Quality journalism is expensive and needs readers to pay for it. Your support will define our work and ThePrint’s future.


Jewelers “will try to instigate demand, but in light of the general economic slowdown, no major change in demand prospects are likely before December,” said Harish Galipelli, head of commodity and currencies at Inditrade Derivatives & Commodities.

Here’s what some of the bigger retailers are planning for the festive season.


Tanishq, the flagship brand of India’s most valuable jeweler Titan Co., plans to cut the amount it charges to make jewelry by 25% for gold and a similar amount on the value of diamond jewelry. The charges vary across stores and can contribute as much as 10% to the total cost of an ornament. The company will also give jewelry to winners of a social media competition.

“The jewelry industry has seen a slowdown in the last few months,” said Rajan Amba, chief operating officer at CaratLane, which is 72% owned by Titan. “However, we are optimistic that in the festive season things will start looking up,” with customers seen opting for lightweight and affordable jewelry, he said. The company is giving deeper discounts on higher-end jewelry to encourage more sales.

Kalyan Jewellers

The Warburg Pincus LLC-backed jeweler is perhaps the most generous among the lot, planning to give away 300,000 gold coins via a weekly draw in addition to discounts and lower charges for making jewelry, according to Chairman T.S. Kalyanaraman.

“The present dip in gold prices will further propel small ticket and token buying trends,” he said. Kalyan has also partnered with banks to give additional discounts.

Malabar Gold & Diamonds

The company is giving away gold coins on purchases above 15,000 rupees and is also allowing customers to place advance orders and buy jewelry either at the booked price or the rate at the time of delivery, whichever is lower.

“The economic slowdown has impacted consumer sentiment as a whole across industries and gold jewelry demand in particular, but we are looking the period positively since festive and wedding seasons account for a major share of the annual revenue of jewelers,” according to Chairman Ahammed M.P. Brides may opt for lighter jewelry sets during the wedding season given the increase in gold prices, he said. The peak wedding season in India begins soon after Diwali and gold forms an important part of Indian bridal trousseaus and as gifts in the form of jewelry.

Also read: High prices, poor demand lead to worst slump for India’s gold imports


Subscribe to our channels on YouTube & Telegram

News media is in a crisis & only you can fix it

You are reading this because you value good, intelligent and objective journalism. We thank you for your time and your trust.

You also know that the news media is facing an unprecedented crisis. It is likely that you are also hearing of the brutal layoffs and pay-cuts hitting the industry. There are many reasons why the media’s economics is broken. But a big one is that good people are not yet paying enough for good journalism.

We have a newsroom filled with talented young reporters. We also have the country’s most robust editing and fact-checking team, finest news photographers and video professionals. We are building India’s most ambitious and energetic news platform. And we aren’t even three yet.

At ThePrint, we invest in quality journalists. We pay them fairly and on time even in this difficult period. As you may have noticed, we do not flinch from spending whatever it takes to make sure our reporters reach where the story is. Our stellar coronavirus coverage is a good example. You can check some of it here.

This comes with a sizable cost. For us to continue bringing quality journalism, we need readers like you to pay for it. Because the advertising market is broken too.

If you think we deserve your support, do join us in this endeavour to strengthen fair, free, courageous, and questioning journalism, please click on the link below. Your support will define our journalism, and ThePrint’s future. It will take just a few seconds of your time.

Support Our Journalism

Share Your Views


Please enter your comment!
Please enter your name here