The air of Kucha Mahajani in the labyrinthine heart of Old Delhi is typically thick with the rhythmic clinking of gold being weighed and the constant, low-decibel hum of frantic bargaining. Over the past few weeks though, as the summer heat increases over Delhi, the largest wholesale gold jewellery and bullion market in the capital, and one of the largest and oldest in Asia, seems unusually quiet.
“There was a time when there would be no place to even keep a foot in Kucha Mahajani,” says Rishi Verma, the 56-year-old owner of A R Jewellers, referring to the contrast between an earlier situation and the current relative emptiness of the market.
“Today we have almost no work. Just look around yourself.”
Verma, who is also the general secretary of the Kucha Mahajani Association of traders, sits behind a glass counter that seems larger than his entire storefront, looking out at the quiet alleyway with a weary expression.
“Until recently, people were buying gold in bulk,” Verma recalls. “In 2020, during the Covid-19 pandemic, gold had become very cheap. I used to tell people not to invest in gold, and to instead buy jewellery that they would wear often or in weddings. People were buying 100 grams of gold for investment. Some people used the money they had saved for their children’s education to buy gold.”
Gold has tripled since then. In 2020, the price of gold was approximately Rs 48,651 per 10 grams. By early 2026, it had breached the psychological barrier of Rs 1,50,000, an increase of more than Rs 1 lakh in six years.
The market started to slow down after Diwali last year, Verma says. “Post Diwali, we have been suffering losses. People have stopped buying gold… This price is just too high; demand is bound to drop at such high rates,” he adds.
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India’s gold import bill has almost doubled in the last two years, and reached $72 billion in 2025-26. This has prompted an unusual direct appeal from Prime Minister Narendra Modi urging citizens to embrace austerity to protect the country’s foreign exchange reserves which have plummeted by $38 billion in the two months after the war in the Middle East began.
The PM has called on Indians to stop buying gold for a year, and has suggested working from home to reduce the consumption of fossil fuels. To back this appeal with policy, the government recently hiked the customs duty on precious metals from 6% to 15%.
Under the chaotic canopy of tangled electrical wires crisscrossing between crumbling facades, the narrow lanes of the century-old market are lined with some 800 shops. The Kucha Mahajani market has boomed in recent years, but the current slump is palpable in the reduced footfall and volume of business, the shopkeepers say.
Some six kilometres away, the scene in Karol Bagh’s Beadonpura jewellery market is not very different. The streets here are wide, dominated by multi-storey facades of legacy brands. The neon signs glow brighter, and luxury SUVs and sedans line the kerbs.
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But the crowds are missing. Many salespersons seem to sit idle in the air-conditioned showrooms that look as though they had been built for far larger numbers of customers.
“There has been an 80% drop in customers post Diwali (2025),” estimates the 45-year-old owner of Dhir Diamonds, sitting in his brightly lit but mostly empty shop.
Dhir explains the paradox that he sees in the market. The rapid rise in the price of gold initially fueled a buying frenzy, but the subsequent stabilization at a high peak has scared away people, he says.
“When prices were rising, people were buying gold in bulk. Then when they dropped, there was a large drop in customers. See how empty my shop is. A few months ago, it was crowded almost all day,” he says.
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The bigger the establishment, the higher the loss, says Dhir. “I think big shops have suffered more than us. They have higher fixed costs like salary, electricity and so on.”
So, should the Prime Minister not have given his call for austerity?
No, it is not quite that, says Rishi Verma. He believes that the call for austerity is actually necessary for the long-term health of the gold economy.
“The appeal the PM has made is good. This will be in our favour if prices drop to earlier levels or stabilise a bit,” Verma says.
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However, he wishes the intervention had come sooner. “Had this appeal come eight months ago, our situation would not have been like this. We have to pay GST, we have to pay for raw materials, we have to pay our workers. If gold is not getting sold, how can we possibly do that? Thousands of families can get destroyed,” he says.
