Summary of this article
Gold investors and industry players have outlined their key expectations from the Union Budget 2026–27:
Lower import duties: Calls for a reduction from 6% to 4% or below to make gold more affordable and curb smuggling.
Simplified customs and tax framework: Fewer tariff slabs and clearer procedures to ease compliance and unlock liquidity.
Revival of Sovereign Gold Bonds (SGBs): Measures such as tax-free interest, longer maturities, and digital formats to encourage monetisation of household gold.
Incentives for Gold ETFs: Exemptions on long-term capital gains to promote investment in financial gold products.
Supply-side efficiency: Streamlining electronic gold trading and removing operational bottlenecks.
Policy continuity for jewellery sector: Maintain supportive measures to boost demand, employment, and consumption.
Curb unaccounted trade: Stronger measures to reduce informal and black-market gold trading.
Gold emerged as one of the best-performing assets of 2025, decisively outperforming equities, debt and most global safe haven assets. The yellow metal rallied more than 66 per cent during the year, far ahead of the Nifty 50’s 10.5 per cent gain. The 10-year government of India bond yield also remained in the 6-7 per cent range in a low-interest-rate environment. Only silver and platinum managed to surpass gold, surging over 150 per cent and 140 per cent, respectively, in 2025.
Rally in gold prices was led by heightened geopolitical tensions, a weaker US dollar and rupee, aggressive central bank buying, and a persistently low real yields following US Federal Reserve rate cuts. According to the India Bullion and Jewellers Association (IBJA), 24-carat gold (999 purity) touched an all-time high of Rs 1,40,482 per 10 grams on January 14, 2026.
In India, the metal continues to hold strong economic and cultural importance. It is widely used as a long-term savings tool and as a hedge against uncertainty. With that in place, investor attention has now shifted to the Union Budget 2026–27, which will be presented on February 1. The market is watching closely to see whether the government introduces fresh policy measures or largely maintains a stance of continuity.
Nikunj Saraf, CEO of Choice Wealth, says gold investors are approaching the Budget “with pragmatic optimism,” hoping for measures that improve affordability and encourage a shift from physical gold to financial products.
“At the core is a strong push for trimming customs duties from the current 6 per cent to 4 per cent or below. This would narrow the domestic price premium over global benchmarks, curb smuggling that gobbles up 30–40 per cent of supply, and bolster India’s refining and jewellery export ambitions amid record household stashes nearing $4 trillion,” Saraf said.
He added that any reduction in import duty should go hand in hand with a simpler customs framework, calling for fewer tariff slabs to ease compliance and an amnesty scheme to resolve legacy disputes, which would help unlock liquidity without putting pressure on government finances. Saraf also stressed the need to revive Sovereign Gold Bonds, pitching options such as tax-free interest, longer maturities and digital formats to help monetise idle household gold while avoiding the redemption issues seen earlier. He added that incentives for Gold ETFs, including exemptions on long-term capital gains, could speed up the shift away from physical gold, creating what he described as a “win-win” outcome for both investors and the broader economy.
However, not all market participants are expecting major announcements. Vinayak Magotra, product head and founding team, Centricity WealthTech, believes the Budget is unlikely to deliver dramatic changes for gold.
“We are not really expecting any dramatic changes for gold in this Budget. We have already seen supportive measures being taken in the 2024–25 Budget,” Magotra said, saying that total customs duty has already been reduced from 15 per cent to 6 per cent, while the amended long-term capital gains tax of 12.5 per cent on gold exchange-traded funds (ETFs) and mutual funds has improved investment attractiveness.
“At most, minor fine-tuning around marginal rationalisation of duties can happen,” he said, adding that with markets already volatile and investor participation high, “the likelihood appears low” for additional incentives at this stage, though long-term reforms to improve efficiency in physical and financial gold markets could remain on the policy agenda.
Aksha Kamboj, Vice President, IBJA and Executive Chairperson, Aspect Global Ventures, said the gold trade is closely tracking whether the Budget delivers measures that improve efficiency on the supply side. “A major demand would be the simplification of the tax treatment as well as customs duty structure related to gold imports, in such a manner that it becomes more competitive, perhaps further reducing the import duty on gold,” she said.
Kamboj also stressed the need for “ease in the treatment of capital gains tax, as well as a stable and predictable regulatory regime,” emphasising that gold continues to be a preferred hedge for investors in uncertain markets. She added that steps to remove operational bottlenecks in the trading of electronic gold receipts would be a welcome move for the industry.
Jewellery retailers, meanwhile, are seeking continuity in policy and steps that can support consumer spending. MP Ahammed, Chairman, Malabar Group, said demand for jewellery has already picked up after the reduction in gold import duty announced in last year’s Budget.
“Therefore, in the first full budget of NDA 3.0, the jewellery industry expects policy continuity to boost consumer demand for jewellery, thus generating more employment and playing a pivotal role in the economic growth,” he said.
Ahammed also pressed for tax relief measures to improve disposable incomes and steps to soften the impact of inflation on consumption. He said the government should make the gold monetisation scheme more attractive, including by revising it to allow participation of “recognised and reputed retail jewellers.” Such changes, he said, could help mobilise idle household gold, cut gold imports and reduce pressure on the current account deficit. He also called for stronger measures to curb unregulated business in the retail jewellery sector.
