Platinum demand for vehicle production in India increased by 1 per cent in the first quarter of 2026 compared with the same period a year ago. However, demand for fabrication jewellery was the lowest in 10 quarters, declining by 15 per cent, the World Platinum Investment Council (WPIC) Q1 2026 report said.
Indian vehicle production is heavily biased toward pickups and SUVs, which naturally require higher platinum group metal (PGM) loadings to meet emissions standards.
The projections for the whole of 2026 are 2 per cent increase, buoyed by the revised Goods and Services Tax (GST 2.0) framework. This policy reduced taxes on eligible light-duty vehicles from 28 per cent to 18 per cent, stimulating production of pure internal combustion engine (ICE) and hybrid vehicles, it said.
Import duty hike
However, the report has not taken into account the hike in the import duty to 15.4 per cent last week. The doubling of the duty is expected to raise the cost of emission-control systems used in cleaner internal combustion vehicles. The biggest impact will likely be on diesel SUVs and strong hybrid cars that use higher quantities of the metal in their catalytic converters.
The report still projects India as a bright spot for platinum demand, which is expected to be resilient and witness growth across automotive and jewellery sectors.
Demand for platinum jewellery fabrication fell by 15 per cent year-on-year to 45,000 ounces. It was the lowest since the third quarter of 2023.
Slack exports, depreciation of the Indian rupee, offsetting corrections in global market and disruptions due to the Iran war, which consequently led to a hike in insurance premiums, affected jewellery demand, it said.
Store expansions to drive demand
Despite the 15 per cent drop in Q1 demand, WPIC report projected a 5 per cent increase in jewellery fabrication demand. The growth is expected to be driven by store expansions by corporate retailers and increasing consumer awareness.
In addition, the widening price gap between gold and platinum will encourage retailers to increase platinum inventory, specifically in lightweight designs, studded diamond jewellery, and bi-metal pieces.
The other optimistic view on the Indian demand was the hope that retail dealers could sell bars and coins with manufacturers establishing dedicated facilties from the. The report expects investors to turn to platinum coins as part of their portfolio diversification due to volatile equity markets and geopolitical tensions.
“Some local jewellers even liquidated unsold gold and silver inventory in late 2025/early 2026 to shift their product structures toward platinum investment products,” it said.
4th year of deficit
Overall, the WPIC expects the global platinum market to be in deficit to the tune of 297,000 ounces in 2026. It is the fourth year in a row of a deficit of the metal due to supply shortfall.
However, there was a “surprise” surplus production of 268,000 ounces in the first quarter. At the end of the first quarter a year ago, the deficit in the precious metal’s supply was 658,000 ounces.
The production surplus was driven by investment outflows and strong mine supplies, which increased by 22 per cent to 1,320,000 ounces. Platinum recycling increased by 9 per cent in the first quarter to 1,826,000 ounces.
Global platinum demand is forecast to decrease by 9 per cent year-on-year to 7,674,000 ounces this year. Investment demand may decline by 54 per cent as high prices are leading to profit-booking. Industrial demand rebounded by 83 per cent due to a surge in glass demand driven by new fibreglass capacity additions supporting AI infrastructure and printed circuit boards.
Automotive demand is forecast to drop 2 per cent and that of jewellery by 12 per cent this year, mainly in China, where the demand slumped by 42 per cent in the first quarter.