Investors panic as India hints at import duty cut, sending gold and silver ETFs plummeting
Gold ETFs fell between 1.3% and 2.3% at Thursday’s close, while silver ETFs declined 1.2-2.3%. In the international spot market, gold was trading flat at $4,594 an ounce on Thursday evening, while silver was up 0.1% at $68.18 an ounce.
“The divergence between Indian and global gold and silver prices, and their ETFs, was primarily driven by the market anticipating a potential cut in import duties,” said Anindya Banerjee, head of currency & commodity research, Kotak Securities. He added that while the duty may not be reduced all the way back to 6% from the current 15%, even a partial reduction could weigh on domestic prices.
“This expectation led to selling pressure last night as well as on Thursday,” he said.
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A cut would make gold and silver cheaper in India even if global prices remain unchanged. Exchange-traded funds, which track domestic prices, fell in anticipation, causing the divergence.
Among gold ETFs, Nippon India ETF Gold BeES, the largest by asset size, declined 1.75%. It has gained 9.6% in the past month and 18.1% so far this year.Nippon India Silver ETF, also the largest by assets in its segment, fell 1.6% on Thursday. It has gained 6.3% in the past month and 5.1% so far in 2026.
Apurva Sheth, head of research at Samco Securities, said the import duties were introduced a couple of months ago amid currency weakness, and with conditions now normalising, the government may consider rolling them back.
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