July 9, 2026 The global silver market is watching India closely: although local consumer demand has been rather subdued recently, premiums for the precious metal are currently skyrocketing on the subcontinent. The cause of this physical shortage in the world’s largest silver market is not a sudden surge in demand, but massive regulatory intervention by the government. The drastic import restrictions have brought foreign inflows to a virtual standstill and are driving local premiums to a six-month high. Import ban drains the domestic market India traditionally meets more than 80 per cent of its silver requirements through imports. The reactions to the restrictive trade policy have been correspondingly fierce. In mid-May, New Delhi drastically restricted imports of the metal in almost all forms and tightened the rules further in June by introducing a mandatory licensing requirement for silver granules and powder. The impact on trade figures is striking: whilst imports in May had already fallen year-on-year from 534.3 to just 46.8 tonnes, the volume fell further in June, according to industry insiders. This artificial shortage is now forcing buyers to pay huge premiums. Whilst silver was still trading locally at discounts of up to US$5.50 in May, premiums over the official world market prices have recently soared to a whopping US$6.50 per ounce – a premium of more than ten per cent. Currency protection meets dwindling stock levels Behind this crackdown lies the clear macroeconomic objective of reducing pressure on foreign exchange reserves and supporting the domestic rupee. Alongside the import restrictions, the government had already massively increased import duties on gold and silver from six to 15 per cent. The fact that the physical shortage did not escalate immediately was solely due to profit-taking by local ETF investors, who liquidated their holdings in the wake of the duty increases in May, thereby temporarily injecting liquidity into the domestic market. However, these buffers have now been exhausted. At present, the Indian market is almost entirely reliant on supplies from Hindustan Zinc, the country’s largest silver producer. As sectors such as the electronics and solar industries, as well as the traditional jewellery sector, are already signalling a resurgence in demand, premiums are likely to climb further if import licences are not granted. For the global market, this presents a mixed picture: on the one hand, the absence of India – a major buyer – from the world market could put downward pressure on international prices in the short term. On the other hand, the situation impressively demonstrates how quickly government intervention can lead to physical shortages in markets for raw materials essential to industry. Source： https://goldinvest.de/en/the-current-state-of-the-silver-market-in-india-import-restrictions-are-leading-to-a-drastic

The Aluminum Association of India (AAI) has urged the government to raise import duties, introduce aluminum scrap quality standards and implement grade-based HSN codes to curb low-quality scrap imports. AAI said India's aluminum imports reached a record 3.479 million tonnes in FY26, with aluminum scrap imports costing over INR 402 billion, posing risks to domestic investment, recycling development and the country's aluminum industry.

India's aluminium industry is debating aluminium scrap import duties and quality regulations. While the Aluminium Association of India (AAI) supports stricter quality controls, the Material Recycling Association of India (MRAI) and Aluminium Secondary Manufacturers Association (ASMA) are calling for the removal of the current 2.5% import duty to reduce raw material costs. Industry participants also noted that tightening scrap retention policies in Europe, the Middle East and the US could further influence India's future scrap import policy.

Curated by Copilot Mid-year price outlook: WGC projects gold to hover near $4,100/oz in H2 2026, with upside if macro or geopolitical risks worsen. Correction from record: Prices fell over 25% from January’s $5,600 peak due to a strong dollar, Fed hike fears, and easing Iran tensions. Supportive demand factors: Central bank purchases and long-term investor participation may limit downside and sustain gold's role as a strategic asset. WGC forecasts gold stability with potential for sharp upside The World Gold Council’s mid-year outlook projects gold trading within 5% of $4,100/oz in H2 2026 under current macro conditions. Scenario analysis suggests a climb toward $4,500 is possible, and only a strong, clear catalyst could push prices sustainably to $5,000. Key upside drivers include worsening economic or geopolitical conditions, a dovish turn in Fed policy, and increased long-term investor participation. Newsable Asianet News + 1 From January's record high to mid-year correction Gold has dropped more than 25% from its January 2026 record of $5,602, with London spot prices down over 33% from their peak. The reversal followed a strong US dollar, rising bond yields, and expectations of prolonged higher interest rates, alongside reduced safe-haven demand after US-Iran ceasefire developments. Analysts view the pullback as a corrective consolidation rather than a structural bear market, with technical support seen near $3,900 and $3,600. The Financial Express + 1 At current levels, the headwinds and tailwinds are unusually balanced. Every major gold bull run has seen a 30–40% correction before the next leg higher, and the current decline from January’s peak sits within that range. Kaynat Chainwala,AVP Commodity Research, Kotak Securities The Financial Express Gold rallies on softer U.S. labour data Weaker-than-expected US jobs growth in June reduced market bets on a September Fed rate hike, helping gold secure its first weekly gain in five weeks. The softer labour data also pressured the US dollar, making gold more affordable for buyers using other currencies. Central banks added 41 tonnes to reserves in May, reinforcing long-term demand support despite recent volatility. The Economic Times + 2 Why the forecast matters for investors now For investors, the WGC’s range-bound outlook suggests patience and phased accumulation strategies amid uncertainty over Fed policy and dollar strength. Historical patterns show that major gold bull runs often see 30–40% corrections before resuming upward, aligning with the current decline. In India, domestic prices remain supported by rupee weakness and higher import duties, cushioning global downside and offering relative stability. The Financial Express + 2 Source： https://www.msn.com/en-in/news/insight/wgc-sees-gold-steady-near-4-100-in-h2-upside-if-risks-rise

July 2, 2026 Following the extreme price drop from $5,500 to below $4,000 per ounce, the gold market is currently struggling to find direction. The key question now is: Will the second half of 2026 cement a sideways trend, or will new factors spark the next rally? The latest outlook from the World Gold Council (WGC) provides answers to these questions. Currently, the precious metal is stabilizing amid moderate growth, persistent inflation, and easing concerns about interest rates. The WGC sees the fair value for the coming months at around $4,100, but expects a fluctuation range of five percent. However, a massive upward breakout remains a realistic scenario: economic downturns, geopolitical escalations, or falling interest rate expectations could quickly drive the price back above $4,500, the WGC said. On the downside, the market is well-protected, as experience shows that pullbacks of more than 10 percent quickly attract countercyclical buyers. The extreme price volatility in the first half of the year, triggered by the U.S.-Iran conflict, would gradually subside, the WGC continued, and return to historical averages. The regional dynamics are particularly interesting: While sharp sell-offs have recently occurred primarily during U.S. trading hours, Asian investors have regularly driven strong recoveries. This underscores Asia’s growing market influence on global price formation. Gold: Asia’s Market Influence Grows According to WGC experts, two heavyweights will significantly dictate price trends for the rest of the year: central banks and the Indian market. Despite isolated portfolio shifts in the first quarter, WGC data for 2026 signal sustained buying interest from the official sector. Every additional purchase above the long-term average not only strengthens physical demand but also sends a strong buying signal to institutional investors. The situation in India is the opposite. To conserve foreign exchange reserves in the face of high energy prices, the Indian government has drastically raised gold import duties from 6 to 15 percent and has actively worked to curb purchases. Although this fundamental shift for the world’s second-largest gold market has, according to the WGC, already been largely priced in at current levels, a further economic slowdown in India could place additional pressure on physical demand there as well as on the market for gold-backed loans. In summary, gold remains caught between these forces. Without new macroeconomic catalysts, stabilization at current levels is the most likely scenario. However, should new signs of crisis emerge, the fundamental upside potential is immense, while the downside risk is effectively limited by the reliable network of central banks and long-term investors. Source： https://goldinvest.de/en/gold-price-forecast-wgc-sees-potential-for-a-breakout-above-usd4-500

Nearly one year after China reopened qualified black mass imports, the market has evolved differently from initial expectations. While stronger linkages have emerged between China's domestic and overseas markets, water-soluble fluorine remains a key constraint on direct imports. Meanwhile, overseas intermediate processing has gained attention as an alternative supply chain model, reflecting the industry's growing focus on cross-border resource integration and supply chain optimization.

Jun 05, 2026, 02:40 AM Import duty hike and volatile prices keep Indian gold demand subdued. China premiums narrow as cautious sentiment weighs on physical buying. Analysts warn smuggling risk rises as domestic discounts widen sharply. India’s gold demand remains subdued as buyers stay cautious amid volatile prices and higher import duties, with premiums narrowing in China as well. Analysts warn that regulatory tightening and inflation risks could keep consumption weak through 2026. Domestic gold prices were trading around INR 158,400 per 10 grams on Friday. India is one of the largest consumers of gold in the world. Subdued demand in India Indian gold demand has slowed, with buyers hesitant due to volatile prices and elevated import duties, according to a Reuters report . Traders said consumers are reluctant to commit to purchases, particularly after the government raised the import duty to 15% in May, the steepest increase on record. “Demand is very weak. People are waiting for prices to stabilize,” one Mumbai-based dealer told Reuters. The World Gold Council (WGC) noted in its May update that jewellery and bar-and-coin demand could decline by 50–60 tonnes (10% year-on-year) in 2026 due to the duty hike. Domestic prices are trading at a deep discount to landed prices, widening from about $14/oz before the hike to nearly $150/oz afterwards, as ample supply and profit-taking weighed on premiums. Regulatory tightening and market impact The duty hike was part of broader measures aimed at conserving foreign exchange reserves amid geopolitical uncertainty and a weakening rupee. Banks paused bullion imports for over a month earlier this year due to delays in government notifications, further disrupting supply. Large chain jewellers reported panic buying immediately after the duty announcement but expect slower sales ahead. Smaller retailers, already pressured by high prices, are struggling with reduced volumes and margins. China premiums narrow The premiums in China, the world’s top consumer, have narrowed, reflecting cautious sentiment. Buyers are hesitant as global prices remain volatile, and local demand has softened. This trend mirrors India’s slowdown, suggesting broader regional weakness in physical gold consumption. The WGC’s May commentary noted that gold fell 1% in May, finishing at $4,546/oz, as positive risk sentiment and ETF outflows weighed on prices. Analysts warned that the Federal Reserve may need to hike rates later this year as inflation pressures mount, which could prolong headwinds for gold. “Gold is vulnerable, perched on its 200-day moving average, in what looks like a declining channel,” the WGC said. Smuggling concerns and outlook Past trends suggest that higher import duties increase unofficial inflows. After the 2013 duty hike, smuggled gold rose sevenfold within a year. A similar pattern was seen after the 2022 hike to 15%, when unofficial imports surged from 17 tonnes to nearly 50 tonnes. Analysts caution that the latest increase could again encourage smuggling, widening the domestic–international price gap. India’s gold demand is expected to remain muted in the near term, with jewellery purchases subdued outside of weddings and festivals. Investment demand is more sensitive to duty changes and could decline further if inflation persists. Globally, ETF flows remain lacklustre, and the possibility of Fed rate hikes poses additional risks. For now, the market is caught between regulatory tightening, volatile prices, and cautious consumers. Unless prices stabilize and policy pressures ease, India’s gold demand is likely to stay weak through the rest of 2026, with broader implications for global bullion trade. Source： https://invezz.com/news/2026/06/05/india-gold-demand-weakens-as-soaring-prices-keep-buyers-on-the-sidelines/

22 May, 2026 Highlights Gold import duty was raised sharply by 9%– from 6% to 15%, the steepest increase on record – alongside broader regulatory tightening Domestic gold prices have not yet fully reflected the duty hike amid weak demand and ample supply; local markets are currently in deep discount from the landed price 1 Past trends indicate that higher duty increases unofficial inflows, although official imports remain relatively resilient Gold demand is expected to moderate in 2026, with jewellery and bar and coin demand projected to decline by 50–60t (~10% y/y) on account of the import duty hike. Policy actions on gold imports Since early April the government has adopted a series of measures aimed at moderating gold imports. These have been part of a broader push to conserve foreign exchange reserves amid geopolitical uncertainty and mounting pressure on the INR, which has depreciated by more than 7% y-t-d. These measures include price-based actions, administrative and regulatory tightening, and consumer-directed messaging. While noteworthy, they are not unprecedented; gold is among the top five imports for India, accounting for 8% of the country’s merchandise imports in 2025, and similar measures have been utilised in the past. On the price front, the gold import duty was raised sharply from 6% to 15%, making it the single largest increase on record and fully reversing the duty cut of July 2024 ( Chart 1 ). Rules were also tightened for gold imports linked to exports (under the advance authorisation scheme) 2 and the Prime Minister has directly appealed to consumers, urging them to avoid buying gold for a year. 3 Chart 1: Import duty reverses course Customs duty on gold (%)* *As of 13 May 2026 Source: CBIC, World Gold Council. These measures followed a series of policy actions that were seen as efforts to slow the import of gold, including the delay in issuing annual licenses for bullion imports to banks, 4 restrictions on the import of all forms of gold, silver and platinum jewellery and platinum alloys; 5 and continued delay in issuance of notification exempting banks from the Integrated Goods and Service Tax (IGST), 6 which led to the banks pausing bullion imports for over a month. 7 The pattern of gold import duty revisions To date, India’s gold import duty revisions have been infrequent, with long periods of stability between policy revisions. Gold imports were subject to a flat duty (a fixed rupee amount per 10g) prior to 2012, but this was subsequently replaced by a value-based duty structure. Between 2012 and 2013 duties were raised repeatedly through a series of 2% hikes, up to 10%. This was followed by a prolonged gap of nearly six years before a further 2.5% hike in July 2019. Since then, revisions have become larger and more frequent, including duty cuts in 2021 and 2024 and sharp hikes in 2022 and 2026, reflecting a more active use of import duties to manage trade dynamics. Table 1: India’s gold import duty cycle Source: CBIC, World Gold Council Price adjustment – the tariff lag effect As expected, the import duty hike led to an immediate increase in domestic gold prices. However, the rise in prices was lower than the 9% increase in duty. Physical market prices, proxied by the MCX spot gold price, have risen in the range of 4% to 6% since the change in duty. While the duty hike mechanically raises the official domestic or landed price, 8 physical market prices do not fully or immediately mirror the increase in duty – rather they adjust to it with a lag, particularly when the change is as steep as the current 9%. Moreover, the increase came at a time of seasonally weak demand – summer wedding purchases are largely over, and the period from mid-May to mid-June is considered inauspicious for buying gold – thus limiting the full pass-through of the duty hike. Market feedback indicates that there is ample supply from the exchange of old gold jewellery for new, and the likely front-loading of imports, further limiting the rise in price. Chart 2: Prices have risen less than the duty hike Landed price and MCX spot gold price in USD per ounce* *As of 18 May 2026. Landed price is the international prices (LBMA Gold Price AM) adjusted for import taxes. Source: Bloomberg, CBIC World Gold Council. Domestic gold prices trade at a deep discount post duty revision In the immediate aftermath of the import duty hike, domestic gold prices traded at a steep discount to official prices, 9 widening from an average of US$14/oz the week prior to the duty hike to nearly US$150/oz ( Chart 3 ). The rise in domestic prices post the duty hike triggered profit-taking by investors, boosting supply even as physical buying weakened, and bullion dealers likely offloaded inventory imported at lower duty rates, adding to market supply. Chart 3: Discounts widened sharply NCDEX gold premium/discount relative to the official domestic price* *As of 15 May 2026. Source: NCDEX, World Gold Council. Previous import duty hikes in 2019 and 2022 also resulted in discounts in the domestic market, but this episode has been significantly more pronounced due to the scale of the increase ( Table 2 ). Table 2: Post-duty hike movement in domestic gold price discounts (US$/oz) Source: NCDEX, World Gold Council Market and trade reaction and expectations Share prices of listed jewellers fell by ~2%–17% following the duty hike, reflecting expectations of weaker discretionary demand. Market feedback and trade interactions suggest a varied impact across segments, with many retailers indicating a likely pause in procurement. Large chain stores saw a brief period of panic buying after the announcement, driven by expectations of further measures, and while they expect a slowdown in sales, they remain relatively resilient given inventory buffers and continued support from bridal demand. Mid-sized and regional players continue to see buying from affluent customers but are expecting to rely more on exchange programmes and tighter inventory cycles going forward. Smaller retailers appear the most vulnerable: already stretched by persistently high prices, they now face added pressure from sales volumes and profit margins. Import duties and smuggling Import data points to a consistent relationship between higher import duties and the inflow of unofficial gold. Between 2013 and 2026 increases in import duty were mostly followed by higher levels of unofficial or smuggled gold, while duty reductions coincided with sharp declines in such inflows. Excluding the COVID years of 2020–21, the correlation between import duty and unofficial imports is positive at 0.52, indicating a meaningful link between higher duties and smuggling activity. Following the 4% duty hike in 2013, unofficial imports increased sharply from around 10t in Q1 of that year to 70t by Q1 2014, a seven-fold increase in under a year. Even when duties were steady at 10% through the second half of 2013 until Q2 2019 unofficial inflows remained elevated, averaging 34t per quarter. This suggests that once smuggling networks are established they are difficult to unravel. A similar pattern was observed after duty was hiked from 10.75% to 15% in July 2022. Unofficial imports rose from 17t in Q2 2022 to nearly 50t by late that year and stayed elevated through much of 2023. In contrast, after duty was cut to 6% in July 2024, unofficial imports fell almost immediately to near zero. There was a temporary drop in unofficial imports during 2020–21, which can be attributed to COVID-related disruptions. The evidence suggests that higher import duties widen the domestic–international price gap and increase the incentive for smuggling, while lower duties reduce its attractiveness. Chart 4: Import duty driven shifts Source: Metal Focus, World Gold Council. Limited duty sensitivity of imports Our analysis suggests that import duty changes have had a limited influence on official import volumes over the past 13 years. 10 Across duty regimes ranging from 6% to 15% official imports remained relatively resilient, between 175t and 236t per quarter in most periods, excluding the COVID period in 2020. The highest quarterly imports were recorded under the 10.75% duty regime (236.2t), while imports also remained stable at the higher 15% duty rate (174.5t). Statistically, the overall correlation between duty rates and official imports is negative 0.17, indicating a weak relationship between the two. This suggests that duty changes are not a key driver of imports; rather, broader demand conditions play a greater role. Chart 5: Steady imports through duty cycles Average quarterly official imports at various import duty levels* *As of 18 May 2026. Source: DGCIS, CBIC, World Gold Council Recent data also highlights import resilience: April imports rose to US$5.6bn, up more than 80% on an annual as well as a sequential basis. This was despite banks pausing gold imports as they awaited the renewal notification that exempt them from the integrated goods and services tax (IGST). This suggests that the imports were likely driven by refiners, who increased their intake of gold doré around the key demand period of Akshaya Tritiya (19-20 April) further supported by gold price moderation. At the same time, some degree of front loading of imports – in anticipation of curbs amid the prolonged Iran-US conflict, elevated oil prices, and the INR vulnerability to a high import bill – cannot be ruled out based on anecdotal evidence. In volume terms, we estimate imports in April were in the range of 48-55t. Chart 6: Imports rise despite disruptions Monthly gold imports in tonnes and US$bn* *Includes World Gold Council estimates. Source: Ministry of Commerce and Industry, CMIE, World Gold Council Gold ETFs: flows slow Indian gold ETFs continued to attract inflows in April 2026, marking the 12th consecutive month of positive flows. Net inflows stood at INR30.4bn (US$325mn), broadly in line with our estimates . 11 While inflows were modestly higher sequentially (up 3% m/m), they remained well below January’s peak, at about 13% of the INR240bn (US$2.6bn) recorded at that time, signalling a moderation in demand after a very strong start to the year. Redemptions stayed elevated in April at INR20.5bn (US$220mn), reflecting ongoing profit-taking, a trend seen since February. Cumulative holdings rose by 1.1t to 116.7t, while AUM stood at INR1,781bn (US$19bn), a modest 3% decline from January, largely due to softer gold prices (down ~9% in INR terms). Investor participation remained healthy, with folios (or accounts) reaching 12.5mn, although growth slowed in April, with folio additions of 77,413 – the lowest since September 2024. Gold ETFs experienced outflows following the import duty hike, with redemptions from 13-18 May largely reversing earlier gains. On a month-to-day basis, however, demand remains marginally positive at around INR1bn (~US$12mn). Chart 7: Gold ETF momentum softens Gold ETF flows in INRbn, and total holdings in tonnes* *As of end April 2026. Source: AMFI, ICRA Analytics, CMIE, World Gold Council Demand moderation Gold demand trends across different duty regimes indicates that while import duties influence consumption, other key factors such as gold prices, income growth and inflation, simultaneously impact demand. Periods of high import duties have generally coincided with a moderation in demand, particularly for bars and coins. Average quarterly demand remained relatively subdued during the extended 10% duty period of 2013-19 ( Chart 8 ) as well as during the period of 12.5% duty (2019-20), although the latter was also affected by COVID. Chart 8: Tariffs temper demand Average jewellery and bar and coin demand at various import duty levels* Source: Source: Metal Focus, CBIC, World Gold Council Our econometric models 12 suggest that changes in import duties tend to impact gold demand in both the short and long term, although the impact differs across jewellery and investment products such as bars and coins. Investment demand appears more sensitive to duty changes, while jewellery demand has shown greater resilience. Jewellery consumption is influenced more by prices and inflation and import duties have less of an impact. This is likely because jewellery purchases often tend to be a requirement, particularly for weddings and social occasions. Investment demand on the other hand is linked to income levels and import duties, with higher duties and restrictions tending to weigh on demand. In the short term, factors such as inflation and rainfall also influence investment demand alongside taxes. Looking at 2026 as a whole, we estimate that combined jewellery and bar and coin demand could decline by around 50-60t, around 10% lower than the previous year due to the impact of the import duty hike. Other factors, such as the gold price, changes to income levels, inflation, or effects from the monsoon would further influence annual demand. Footnotes 1 Landed price is the international price (LBMA Gold Price AA) adjusted for import taxes. Prices as of 18 May 2026. 2 Centre further tightens gold import rules, caps advance authorization at 100 kg, The Tribune, 20 May 2026. 3 Why PM Modi asked Indian families not to buy gold for a year, India Today, 11 May 2026. 4 After delay, DGFT authorises 17 banks to import bullion for 3 years, Indian Express,17 April 2026 5 India imposes immediate restrictions on gold, silver and platinum jewellery imports to curb FTA misuse, NDTV Profit, 1 April 2026. 6 IGST is a tax on the supply of goods and services between states in India. 7 India's gold import crisis: Why banks halted shipments for a month and what it took to start again, Money Control, 12 May 2026. 8 Landed price is the international price (LBMA Gold Price AM) adjusted for import taxes. 9 Official domestic price is the landed prices which is the international price adjusted for import taxes. 10 Q3 2013 to Q1 2026. 11 Based on partial information 12 Reference page 128-132. Source： https://www.gold.org/goldhub/gold-focus/2026/05/india-gold-market-update-import-tightening

Steep price reversal: Silver plunged nearly 11% and gold turned volatile after India hiked import duties to 15%, reversing initial post-hike gains. Policy-driven impact: The government raised duties to curb imports, protect forex reserves, and support the rupee amid the West Asia crisis. Market outlook: Higher tariffs may hurt demand, slow industrial imports, and prompt smuggling, while global inflation and dollar strength keep pressure on bullion. Immediate market reaction to duty hike The import duty increase from 6% to 15% on gold and silver triggered a dramatic reversal in silver prices, with MCX silver plunging nearly 11% or ₹32,624 per kilogram in just two sessions. Gold prices also turned volatile, with spot gold trading around 4% below its recent peak as inflation data and a stronger US dollar sapped momentum. The initial rally from higher landed costs was quickly erased as traders booked profits and demand weakened at elevated prices. Economic and policy rationale behind the hike The Finance Ministry's move to restore the earlier higher duty structure aims to curb non-essential imports, safeguard foreign exchange reserves, and support macroeconomic stability amid the West Asia crisis. Officials highlighted the need to prioritise forex for essential imports like crude oil and fertilisers, noting the rupee’s record low this year. The hike follows Prime Minister Modi’s call for citizens to avoid non-essential gold purchases, reversing 2024’s duty cuts intended to curb smuggling and aid the jewellery sector. Live Mint + 4 "The increase in customs duty on imports of gold, and precious metals announced by the government is aimed at safeguarding macroeconomic stability and conserving foreign exchange reserves. The measures have been taken also to moderate non-essential imports during a period of heightened global uncertainty arising from the ongoing West Asia crisis." Fortune India Why volatility matters for India’s bullion market India, the world’s largest silver importer and second-largest gold consumer, faces potential demand destruction as higher tariffs lift local prices. Silver’s significant industrial demand—from solar panels to EVs—means it is trading more like an industrial commodity, making it sensitive to growth concerns from elevated oil prices. Analysts warn that reduced official imports could revive smuggling and dampen both jewellery and industrial demand, especially if geopolitical tensions keep inflation risks high. The Economic Times + 4 Short- and long-term outlook In the short term, bullion prices may remain range-bound as profit booking offsets structural support from central bank purchases and ETF inflows. Over the longer term, silver retains strong global demand drivers from AI infrastructure, green energy, and electronics, though a weaker economic outlook could limit gains. Policymakers face the challenge of balancing macroeconomic stability with potential social and market disruptions from sharp tax interventions. The Economic Times + 4 Source： https://www.msn.com/en-in/news/insight/gold-and-silver-prices-tumble-after-steep-import-duty-hike

Published at:13th May 2026, 1:44 pm Overview India doubled platinum import duties to 15.4%, escalating costs for vehicles reliant on catalytic converters, particularly diesel SUVs and strong hybrids. This move, aimed at forex conservation, is expected to increase car prices and may accelerate the shift toward battery electric vehicles as automakers seek to mitigate rising input expenses. Duty Hike Increases Vehicle Costs India's decision to more than double its import duty on platinum, from 6.4% to 15.4%, is set to significantly increase costs for the domestic auto industry. This policy, aimed at conserving foreign exchange reserves amid geopolitical instability in West Asia, directly impacts the supply chain for internal combustion engine (ICE) vehicles, particularly their emission control systems. The move is expected to raise production costs, hitting vehicle segments that use more platinum in their catalytic converters the hardest, such as diesel sport utility vehicles (SUVs) and strong hybrid models. Market Reaction and Stock Divergence Investor reaction was mixed. Some component suppliers saw their shares decline, with Sharda Motor Industries dropping 2.1% to INR 950. In contrast, larger automakers like Tata Motors and Maruti Suzuki saw modest gains, rising 1.2% to INR 1250 and 1.5% to INR 13000. Analysts noted that companies like Maruti Suzuki (P/E 35, market cap ~$35 billion) are better positioned to pass on input costs than smaller suppliers. Tata Motors (market cap ~$20 billion, P/E 28) faces higher direct costs due to its significant diesel SUV range, while Mahindra & Mahindra (market cap ~$25 billion, P/E 32) is also exposed through its diesel-heavy offerings. Estimating Price Hikes and Emission Compliance Costs The increased duty increases the cost of meeting BS-VI emission standards. Industry estimates suggest potential price increases ranging from ₹2,500–₹4,000 for entry-level petrol cars, ₹8,000–₹12,000 for mid-size diesel SUVs, and ₹12,000–₹18,000 for strong hybrids. These figures reflect higher platinum-group metal loading, from 2-4 grams in petrol cars to 6-10 grams in diesel SUVs and 10-15 grams in hybrids. Component manufacturers such as Bosch India (P/E 45, market cap ~$12 billion) and Tenneco (P/E 15, market cap ~$3 billion) will likely face contract renegotiations, as most agreements include commodity pass-through clauses. Past duty adjustments in 2023 led to 3-5% price hikes for affected vehicles and temporary stock declines for OEMs, a pattern that could repeat if automakers cannot fully pass on costs. The Indian auto sector, which reported 8-10% year-over-year volume growth in Q1 2026, now faces added margin pressure on top of existing commodity and currency challenges. Global platinum prices have recently traded between $950-$1050 per ounce, influenced by industrial demand and global events. Risks for Automakers and EV Competition The higher import duty poses a significant risk for automakers and component suppliers heavily reliant on platinum-based catalytic converters. Companies with large portfolios of diesel SUVs and strong hybrids, including Ashok Leyland (P/E 22, market cap ~$7 billion) and Toyota Kirloskar Motor (a subsidiary of Toyota Motor Corp), face direct cost increases. This duty burden worsens their competitive position against battery electric vehicle (BEV) makers. While Tata Motors is investing in its EV division, its existing ICE operations are now less cost-competitive. Component suppliers like Sharda Motor Industries (P/E 19, market cap ~$1.5 billion) may struggle to absorb rising costs without affecting order volumes as OEMs seek to keep consumer prices stable. Previous supply chain issues have also highlighted the risks of relying on specific imported materials. Recent analysis of Q4 FY26 filings from most Indian OEMs showed strong demand but also noted existing supply chain cost pressures, suggesting limited room for absorbing further increases without impacting profitability or market share. Mitigating Costs and Shifting to EVs Automakers are exploring ways to manage these rising costs. Strategies include accelerating R&D to reduce platinum loading in catalytic converters and expanding precious metal recycling. The government's concessional duty of 4.35% on imported spent catalysts for recovery offers a pathway for recycling the metal. Analysts believe this could slightly improve the cost competitiveness of BEVs, which do not use catalytic converters. Platinum's growing importance in emerging technologies like hydrogen fuel cells and electrolysers may also lead to strategic reviews of its domestic availability and pricing. Source： https://www.whalesbook.com/news/English/auto/Indias-Platinum-Duty-Hike-Squeezes-ICE-Vehicle-Costs