Gold price surge, import duty hike leave Hyderabad jewellery markets deserted
HYDERABAD: By 17.00 IST on Wednesday, the usually crowded Pot Market in Secunderabad had turned unusually quiet, with only a few customers visiting jewellery stores as gold prices fluctuated sharply within hours.
Inside Viswanath Jewellers, sales staff waited for customers while traders tracked volatile gold rates on mobile applications.
“Yesterday at 21.00 IST, gold was ₹1.55 lakh. By 01.32 IST, it had shot up to ₹1.74 lakh, and now it is ₹1.66 lakh. These fluctuations will put us out of business,” said Kishore, a trader at the store.
He said customers who booked gold at an earlier rate could not be charged revised prices at the time of delivery, squeezing traders’ margins.
Pot Market, near Secunderabad Monda Market, is one of Hyderabad’s major jewellery trade hubs with more than 300 small and medium stores operating within a one-km stretch. Apart from jewellery retailers, the area also houses workshops and pawn brokers catering to traders from districts across Telangana.
Import duty increase adds to traders’ concerns
Jewellers said the Centre’s decision to raise import duty on gold from 6% to 15% further worsened sentiment in the market.
“Bomb phat gaya election ke baad (a bomb has exploded after the elections). Today feels like a Sunday. We usually get 25 to 30 customers daily, but today there are none. The high gold price and the import duty hike have dealt a blow to our business,” said Parasmal Ranka, president of the Telangana Pawn Brokers and Jewellers Association.
Families planning wedding purchases and investments were also reconsidering their decisions amid uncertainty over prices.
“We came from Bowenpally to buy jewellery, but now we are unsure whether prices will stabilise or rise further. There will also be moodam (inauspicious period) after two days. The price has already increased by over ₹2,50,000 since the last time we saved money to buy jewellery,” said Prakash Goud while waiting with his family at a jewellery store.
Walk-ins decline sharply across jewellery hubs
The impact was visible even in Panjagutta, one of Hyderabad’s premium jewellery shopping stretches, where the usual rush for parking was missing.
“Our sales have dropped 27% compared to last year despite promotional offers. Smaller shops have seen business decline by 30% to 50%. Walk-ins at our store have fallen from 60-70 customers a day to 10-15,” said the chief financial officer of a jewellery store in Panjagutta.
He added that large retailers may survive prolonged uncertainty, but smaller jewellers could struggle to sustain operations if high prices continue.
Traders also expect a shift in consumer preference from jewellery purchases to gold coins and bullion, where profit margins are lower.
“Gold jewellery will become inaccessible for poor and middle-class families. It will become an elite purchase. Earlier, our business was 60% exchange and 40% fresh purchases. Now it may shift to 85% exchange and only 15% purchases, further reducing margins for small and medium traders,” the executive said.
