Indian jewellers brace for worst sales in 25 years

India jewellery sales are set to fall to the lowest in a quarter-century, i.e. in 25 years, as a result of the lockdown to combat the rapidly spreading Coronavirus, which has brought the industry to a sudden halt.

The demand for the yellow metal has already tumbled due to a record high domestic prices and the slowest pace of growth in the last 11 years. This is only expected to get worse after Prime Minister Narendra Modi and state lenders imposed an almost-complete lockdown for 21 days on March 24, 2020.

Total purchases are estimated to plummet 30 per cent in 2020 from 690 tonnes last year, according to Anantha Padmanaban, Chairman of All India Gem and Jewellery Domestic Council. As a result, this would make it the smallest annual purchase since 477 tonnes brought in 1995, according to Bloomberg-based World Gold Council reports.

The concerns about the virus have hit local gem and jewellery sector hard with virtually no footfall in the stores. Depreciation in Indian rupee is also keeping local gold prices elevated. On March 24, 2020, the Indian rupee touched a record low of 77.86 against US dollar.

The country’s biggest jeweller by market value, Titan Company, has shut down its stores and manufacturing units as well as announced that will review the situation on March 29, 2020. Shares of Titan fell as much as 35.73 per cent in the last month, dropping a line in the benchmark index.