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27-08-2024
Bureau Report + Agencies
NEW DELHI/ BENGALURU: Gold demand in India during the upcoming festive season is likely to remain robust, as the substantial reduction in import duty has made prices appealing, providing comfort to retail consumers and encouraging purchases, industry officials said.
Higher demand in the world’s second-largest gold consumer could support a rally in global prices, which hit a record high last week. But higher demand for gold imports could increase India’s trade deficit and weigh on the rupee.
“The primary beneficiaries of the reduced duty cut will be retail consumers,” said Sachin Jain, CEO of the World Gold Council’s Indian operations.
India slashed import duties on gold in July to 6% from 15%, a step aimed at tackling smuggling.
Demand during the upcoming festival season will be very strong, Jain told Reuters on the sidelines of the India Gold Conference.
Gold demand in India usually strengthens towards the end of the year, which coincides with the traditional wedding season and major festivals including Diwali and Dusherra, when bullion buying is considered auspicious.
Retail demand has improved since the duty cut brought down prices and this momentum seems likely to continue in the coming months, said Ajoy Chawla, CEO of Jewelry division at Titan, opens new tab
Global prices hit a record high last week, but in India, domestic prices were around 71,800 rupees per 10 grams on Monday, below a record high of 74,731 rupees hit in July.
The duty cut changed sentiment among retail consumers, which were postponing purchases because of the price rise, Asher O, managing director of India Operations at Malabar Gold and Diamonds.
Gold prices could have hit a new record high above 80,000 rupees without the duty cut but now they are trading below the peak, which is likely to increase demand from the next month’s Onam festival, said Asher.
The demand for gig delivery riders by quick commerce platforms like Blinkit, Swiggy Instamart and Zepto may grow 40% on peak-demand days this festive season when the overall home delivery ecosystem is expected to employ 10-12 lakh additional gig riders, industry executives told ET.
Ecommerce and food delivery platforms are expected to bring about 20% more gig riders on board during the peak festive period, they said.
However, while quick commerce currently employs about 3-4 lakh riders, the two older industries have a much larger base of 40-50 lakh gig riders, with about two-thirds of them working in the ecommerce ecosystem, said Balasubramanian Anantha Narayanan, senior vice president at manpower solutions firm TeamLease.
Though quick commerce still represents a small share of overall demand, that share is rapidly increasing, he told ET.
Part of the increase in demand is expected to be satiated by riders who will take up gig work temporarily during the festive period, executives said.
“We often see people take up work during festivals attracted by the bonuses… Some workers like air-conditioning technicians who don’t have as much work during the winter season also join the workforce during the festive season,” a senior executive at a quick commerce firm said on condition of anonymity. “Some of the demand will also be fulfilled by new workers from surrounding villages who might have relatives or friends already working as delivery partners who tell them about increased earnings during festive season,” the executive said.
