India's gold demand jumped 49 percent during the quarter ended June 2022, according to the latest report by the World Gold Council (WGC) released on Thursday. Gold demand stood at 170.7 tonnes in the first quarter, up from 119.6 tonnes in the year-ago period.

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The WGC, however, warned that inflation and INR-USD exchange rates would affect consumer demand. It said government policies impact consumer sentiments as well.

The government had hiked the Customs duty on gold from 7.5 percent to 12.5 percent on July 1. Gold also attracts a 2.5 percent agriculture infrastructure development cess, taking the total import duty to 15 percent.

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The WGC said growth in demand notably from India, the Middle East, and Turkey helped to balance weakness in Chinese markets due to the continued coronavirus lockdowns.

"The strong performance in India balances a significant decline of 28 percent in China, where the market was dampened by coronavirus lockdowns that stalled economic activity and constrained consumer spending," it said.

Global gold demand registered a year-on-year decline of 8 percent during the April-June quarter. The demand was impacted by growth of ETFs outflow, decline in central banks buying and lower demand from the technology segment.

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"Akshaya Tritiya coupled with traditional wedding buying spurred jewellery demand by 49 percent to 140.3 tonnes, though on a low base, as the second quarter of last year was impacted by a devastating second wave of COVID," Somasundaram PR, WGC Regional CEO, India, told PTI.

He said the proposed launch of the India International Bullion Exchange (IIBX) will kick-start a journey to make India a trusted and efficient trading hub and extend its influence in the global bullion markets.

Prime Minister Narendra Modi will launch the India International Bullion Exchange (IIBX), the country’s first International Bullion Exchange, on July 29.

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(With inputs from PTI)