The gap itself
Kavita IyerMarkets data editorThe Indian gold price is not the international price. It is the world price, landed, taxed and then marked up by a domestic premium that changes with local demand. This page explains the gap itself: what the table shows, why the comparison is only possible once both prices are in the same unit, and what the difference between the two prices means.
Here against abroad
Both prices converted to the same unit, which is the only way the two can be compared at all.
| The same gram | In India | International | Difference | Premium |
|---|---|---|---|---|
| Gold 999, before tax | ₹14,766.70 | ₹12,907.10 | ₹1,859.60 | +14.41% |
| Gold 999, with GST | ₹15,209.70 | ₹12,907.10 | ₹2,302.60 | +17.84% |
| Gold 916, with GST | ₹13,932.09 | ₹11,822.90 | ₹2,109.19 | +17.84% |
Two prices, one unit
The Indian benchmark is quoted in rupees per ten grams; the international price is in dollars per ounce. The two are never put in the same unit, so the gap is invisible. This site converts both to one gram and converts the dollar price to rupees using a rate read at the same moment. Only then are the two prices comparable.
The conversion is arithmetic, but it matters because the two sources report in different currencies and different weights. A comparison made before conversion would be meaningless. The table above this text shows the result: the rupee price of a gram in India, the international gram in rupees, and the difference between them, before and after tax.
What the table shows
The table has rows for the Indian price, the international price, and the difference. The Indian price is the benchmark published by the India Bullion and Jewellers Association, converted to one gram. The international price is a gold price in dollars an ounce, converted to grams and rupees. The difference is the premium.
The premium is shown before tax and after tax. The association's rates are published before tax; where this site shows what a buyer pays, the three per cent goods and services tax is added and labelled as such. The after-tax figure is the price a buyer would pay at a counter that charges no making charge, which is rare.
Why the comparison is only possible in one unit
Gold is priced internationally in dollars, and the dollar price moves with the metal. The rupee price moves with the metal and the exchange rate. To separate the two, the dollar price must be converted to rupees at the same moment as the rupee price is read. Otherwise, a change in the gap could be a change in the metal, a change in the rupee, or a change in the premium.
Only when both prices are in the same unit can the premium be measured. The premium is the part of the rupee price that is not explained by the international price. It is the cost of buying gold in India rather than abroad, and it is what this site exists to show.
What the gap is not
The gap is not a saving anyone can capture. The international price is a wholesale quote for metal delivered abroad, in large quantities, before duty and tax. A reader cannot buy at that price. The gap is also not constant: it rises and falls with local demand, and a reading taken on one day may not hold on the next.
The gap is a description of policy and demand. It is the sum of import duty, landing costs, a domestic premium and tax. Each of those components has its own rhythm, and the gap is the visible result. This page describes the gap itself; the next page describes what sits inside it.
Who the gap falls on
The gap falls on the buyer. Every gram of gold bought in India carries the international price plus the gap, and the gap is paid in rupees at the counter. The buyer may not see the gap as a separate line, but it is in the price. The gap is also paid on every gram, not just on jewellery: coins, bars and even digital gold carry the same structure.
The gap is not the same for every buyer. A buyer who pays a making charge pays more than the benchmark, and a buyer who sells back to a counter receives less. The gap is a benchmark, not a price. It is the reference used for tax, for lending against jewellery and for buy-back counters.
When the gap changes
The gap changes when any of its components changes. Import duty changes rarely, but when it does, the gap moves immediately. The domestic premium changes with demand, and it rises in the wedding season and falls in the quiet months. The exchange rate changes every day, and it moves the rupee price even when the dollar price is flat.
The gap also changes when the international price moves, because the premium is measured as a percentage. A falling international price can widen the percentage premium even if the rupee amount of the premium is unchanged. The table above this text updates with each reading, and the gap is different every time.
The gap in brief
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Questions about the gap
Why is the gap invisible?
The gap is invisible because the Indian price is quoted in rupees per ten grams and the international price in dollars per ounce. The two are never put in the same unit, so the difference cannot be seen. This site converts both to one gram and converts the dollar price to rupees, so the gap becomes visible.
What does the table show?
The table shows the Indian price per gram, the international price per gram in rupees, and the difference between them. The difference is shown before and after tax. The after-tax figure is the price a buyer would pay at a counter that charges no making charge.
Why is the comparison only possible in one unit?
Gold is priced internationally in dollars, and the rupee price moves with the metal and the exchange rate. To separate the two, the dollar price must be converted to rupees at the same moment as the rupee price is read. Only then can the premium be measured.
Is the gap a saving I can capture?
No. The international price is a wholesale quote for metal delivered abroad, before duty and tax. A reader cannot buy at that price. The gap is a description of policy and demand, not an opportunity.
Does the gap change?
Yes. The gap changes when import duty changes, when the domestic premium moves with demand, when the exchange rate moves, and when the international price moves. The gap is different every time the site reads the prices.
One gram, two prices, one unit
The Indian gold price is the world price, landed, taxed and then marked up by a domestic premium. This site converts both to one gram and prints the difference, before tax and after.