LUCKNOW, May 28 -- The city's jewellery market faces a severe demand crunch with traders reporting a 60-70% decline in gold and silver purchases following new import curbs tied to the West Asia crisis. The president of the UP Adarsh Sarafa Vyapar Mandal, Kshitij Awasthi, said the Lucknow market records sales of approximately 5,000 kg of silver, 2,000 kg of gold monthly. The state purchases about 60,000 kg silver, 25,000 kg gold each month on average. "The existing restrictions and high duties have disrupted the domestic market's demand-supply equilibrium. Small, unorganised business owners are most impacted. I am afraid if the situation continues we will not be able to handle the demand-supply chains during the festive and wedding season later this year. Per month sales at least triple during the festive and wedding season," said Awasthi. Ravindra Rastogi, owner of a jewellery shop in Aminabad, raised serious concerns regarding the silver market. Since silver production in India is virtually zero, the country depends entirely on imports. However, existing restrictions, high duties have directly impacted demand, leading to a 60-75% slump in silver sales. "Silver, once popular for gifting, and for utensils, has dropped to mere 2% usage as the middle class avoids skyrocketing prices. The market now survives solely on 'old silver', metal exchanged by customers, but this system is unsustainable. The 15% excise duty encourages smuggling, hurting honest, licensed traders. To rectify the situation, the government should reduce the GST on gold, silver from 3% back to 1%, and introduce attractive deposit schemes to circulate idle silver into the market," said Rastogi. Mohit Kapoor, divisional general secretary of UP Adarsh Vyapar Mandal, said about 60-70% of jewellery market sales are hit. "There is uncertainty in the market," he said. Siddharth Jain, media convenor of the Chowk Sarafa Association, said various reasons for the slump include the heat wave, absence of the wedding season, changing prices of precious metals. "There is a need for the government to check the expansion of new showrooms of branded jewellery chains, gold ETFs (through stock exchanges), electronic booking of gold (through various platforms). Online bullion trading should be banned instead of the government only focusing on sarafa, small jewellers," said Jain. Vinod Maheshwari, UP coordinator of the All India Jewellers and Goldsmith Federation, said the federation submitted a memorandum to Union commerce minister Piyush Goyal demanding protection of 3.5 crore people in the jewellery sector and the establishment of a 'Bullion Bank Framework.' The market's supply chain has been significantly impacted. He said that if an order for 10 kg is placed, only 7-8 kg of goods are being supplied from the back end. Since silver production in India is virtually zero, industry is entirely dependent on imports. However, strict import regulations and heavy duties have disrupted the domestic market dynamics. "Due to the surge in prices, silver sales have plummeted by approximately 60% to 75%. Besides, the hike in petrol and diesel prices has driven up labour costs; workers who previously charged Rs 1,000 are now demanding Rs 1,500. If these conditions persist, we will be forced to downsize staff, even if we don't want to," said Maheshwari. Adesh Jain, senior vice-president, Chowk Sarafa Association, said instability is one reason for the purchase decline. "People are thinking twice before using extra money," said Jain....