Jewellers expect at least 20% increase in gold sales with easing of KYC norms

In the Mumbai bullion market, the yellow metal saw a gain of rs 19 in prices to Rs 38,450 per 10 gram of 24-carat gold (plus 3 percent GST), on the back of festive demand. (Image: Reuters)

Everything that glitters might actually be gold this Diwali. Thanks to extension of provisions of PMLA (Prevention of Money Laundering Act) from the present limit of Rs 50,000 to Rs 2,00,000 in the case of jewelry purchases. Going by the rise in sales in the weekend post the announcement, jewelers are upbeat about overall festive sales going up. Expecting at least a 20 percent rise in business against that of last year jewelers welcome the move as much as gold buyers.

“More than 50 percent of sales in gold jewelery happens in the Rs 50,000 and Rs 2,00,000. The move is great news for the middle class whose average buy is in that range. The spend from this tier of the customer base will definitely go up,” said Nitin Khandelwal, Chairman, All India Gems & Jewellery Trade Federation (GJF).

The weekend has already been a busy one for jewelers said Khandelwal. “We have noticed a surge in a number of buys and sales is expected to go up by a minimum of 20 percent this festive season and go on till the wedding season ahead,” Khandelwal added.

Jewelers are finally looking at recovering from a lackluster Navarati this September where sales were poor.

According to industry estimates imports fell by 43 percent in September compared to that last year after the government made furnishing of permanent account number (PAN) mandatory for any purchase of Rs 50,000 and above.

Gold sales are gaining momentum across the country and wedding shopping too have taken off in full swing this weekend soon after the relaxation in KYC norms were announced.

“We had a busy weekend and saw people make some inhibition free purchases. We have seen at least 25 percent rise in sales and we hope the welcome move will spell more good news for the jewelers across the country through the festive and wedding season,” said Mehul Choksi, chairman, Gitanjali Group.

Mostly, jewelers are looking at recovering from the gloom the market had slipped into. “The move will clock more small ticket sales for us,” Joy Alukkas, Chairman, Joyalukkas Group.

“The weekend has already seen a surge in sales of about 10 percent-15 percent and we expect the trend to go northwards as people who were speculating to buy gold would finally have a reason to walk into stores and make purchases,” he added.