In this Sprott’s Thoughts article, republished by Proactive Investors, I explain why India’s gold imports should not be expected to surge merely because of tariff cuts.
Gold demand in India is not simply a matter of price. Gold is already highly liquid in India, and import restrictions are often bypassed through smuggling, bribery, and informal channels. A small reduction in tariffs may change short-term stocking behavior, but it does not fundamentally change why Indians buy gold.
The deeper reason is that India’s economy remains weak, the rupee continues to lose value, and stocks and property are expensive. For many Indians, gold remains a practical store of value in a system they do not trust.