Jewellers went on strike for three days from March 2.
The recent restrictions on gold imports will encourage smuggling and grey markets activities in the country.
The biggest bullion-importing bank in India plans to team up with jewellers for the first time to offer a gold deposit scheme, hoping ease of access and attractive interest rates will tempt people to part with their jewellery and relieve tight supplies.
Gold premiums in India, the world's biggest buyer of the metal, jumped sharply this week as the festive season began, driving up demand, and supply remained tight.
Wants to help govt fight the widening current account deficit.
The retailers are also mulling putting a stop to selling of gold coins and gold bars to curtail investments made in gold, according to an official of trade body All India Gems and Jewellery Trade Federation.
The government should also introduce zero duty for gold imports so as the world trade shifts to India.
In India, the gold prices might come down to Rs 18,500-19,000 per 10 grams level from the current Rs 20,500 per 10 grams level.
India sharpened measures to curb imports of the yellow metal by hiking the import duty and restricting consignment imports, after shipments jumped to more than 300 tonnes in April and May.
Regaining the lost sheen, sales of gold jewellery and coins are set to touch pre-COVID levels in volume terms on the auspicious Dhanteras as easing pandemic concerns and pent up demand saw consumers flocking to stores to buy the precious metal. Increased footfall at stores and brisk sales online as well as relatively softer gold prices compared to record Rs 57,000 per 10 grams level in August spurred increased buying, especially light weight offerings, on Tuesday. Dhanteras is considered to be auspicious for buying precious metals and other valuable items.
Some jewellers kept their shops shut in Mumbai as well.
The GST rate for the sector has not yet been finalised by the government.
Govt has so far refused to bring down the import duty to 2% from the current 10%.
India has imposed several restrictions on imports of gold, the biggest non-essential import item, to curb a record trade deficit.
India celebrated Dhanteras, the biggest gold buying festival, followed by Diwali, when scarcity of the yellow metal and high prices pushed consumers to buy silver and diamond jewellery.
The strike entered the 15th day on Wednesday.
A sharp decline in sales and prospects of a grim future have resulted in a fall in jewellery stocks.
The panel will look into issues related to compliance procedure.
Precious ornaments are estimated to become 3% costlier under GST
Spot gold fell as far as $1,142.10 an ounce on Thursday, its lowest since November 2014.
Jewellers sold huge quantities of precious ornaments at a premium of up to 50%.
The government has asked jewellers to provide information on purchases of gold bars or jewellery worth more than Rs 500,000 by the end of this month, a move seen keeping a check on big transactions amid rising smuggling.
Sales of gold coins and bars should be curbed after reaching around 300 tonnes
Many offer personalised ornaments with 3D printed images and engraved names to lure customers in a scenario of high gold prices.
Consumer sentiment seen better than last year's
Most of the jewellers who had reopened their showrooms in confusion on Monday, kept shutters down today at Mumbai's Zaveri Bazar and several other places, demanding rollback of the proposal.
Over 300 associations, that consists of over 3 lakh manufacturers, retailers, wholesalers and artisans among others, are participating the nationwide stir.
They would intensify the protest if their concerns are not addressed in the Budget.
Gold bullion purchases across Asia slowed this week as a long rally in prices discouraged buyers.
Indian gold demand seen falling to 8-year low in festive quarter.
Jewellers see flat gold sales this Dhanteras
The 80:20 rule mandates importers to channel at least 20% of the import quantity for jewellery exports.
Nearly two-thirds of India's gold demand comes from rural areas where jewellery is a traditional store of wealth for millions who have no access to the formal banking system.
Gold jewellery exports may decline by about 50 per cent in this financial year from last year after government restrictions reduced the availability of raw material, Gitanjali Gems Chairman and Managing Director Mehul Choksi said.
The government has not given any concrete assurance on the rollback of excise duty.
Jewelers also want import duty on gold to be reduced from the current 10 per cent to at least 5 per cent.
Concern would kick in if imports stay at or over 100 tonnes a month.
Non-resident Indians are bringing gold into the country by taking advantage of rules that allow each individual to carry 1 kg of the metal, helping traders cope with restrictions on imports during the peak wedding season.
Dealers are selling gold at a discount of Rs 175 for 10 gm.
The scheme is yet to take off.
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