KATHMANDU, Jan 21: Gold consumption in Nepal has surged following a reduction in customs duties and the start of the wedding season. Before the duty cut, traders reported daily gold sales averaging less than 2 kilograms. Now, sales have increased to as much as 20 kilograms per day.
On November 25, the government reduced the customs duty on gold from 20 percent to 10 percent. Following this reduction, gold imports have risen significantly, especially during the wedding season, according to Manik Ratna Shakya, former president of the Federation of Nepal Gold and Silver Dealers’ Associations (FENEGOSIDA).
The Department of Customs (DoC) has reported a noticeable increase in gold consumption. Since November 30 last year, about 500 kilograms of gold have been imported, totaling Rs 5.79 billion.
In the four and a half months from mid-July to the end of November, Nepal imported 228 kilograms of gold worth Rs 2.49 billion. However, in the one and a half months from late November to mid-January, imports surged to nearly 500 kilograms.
Gold imports surge with the arrival of wedding season
Before the customs duty reduction, gold prices in Nepal were higher than in the Indian market, prompting the government to reduce duties to curb the decline in legal imports.
Following the reduction, commercial banks imported 100 kilograms of gold in a single day on December 1. In Nepal, only commercial banks are allowed to import gold.
Shakya, a gold trader from Indrachowk, Kathmandu, emphasized that demand for gold has soared during this wedding season. Previously, high prices had kept wedding-related demand relatively low.
Tej Ratna Shakya, another gold trader from New Road, reported an increase in business this year compared to previous years, noting that orders for weddings in Falgun (mid-February to mid-March) have already started arriving.
Traders have observed that due to past fluctuations in gold prices, people are worried about a similar trend. Consequently, they are placing early orders for weddings in Falgun.
This year, Magh (mid-January to mid-February) has two auspicious wedding days, while Falgun has eight. In Mangsir (mid-November to mid-December), traditionally the wedding month, there was only one auspicious wedding day this year.
Earlier, in Kartik (mid-October to mid-November), the price of gold in Nepal peaked at Rs 171,000 per tola. After the customs duty reduction, gold prices dropped.
On December 20, the price of gold fell to Rs 148,500 per tola. However, it has increased by Rs 10,000 in the past month.
