Gold Silver Reports — Shares of jewelers climbed in India after the government set the rate for gold under the uniform goods and services tax below expectations, signaling a potential recovery in demand in the world’s second-largest market.

Titan Co. advanced as much as 15 percent to a record 542.50 rupees ($8.4) in Mumbai, while Tribhovandas Bhimji Zaveri Ltd. increased as much as 7 percent, Gitanjali Gems Ltd. was up 8.6 percent and PC Jeweller Ltd. gained 9.8 percent.

India fixed the duty at 3 percent over the weekend, lower than the 5 percent expected, Ketan Shroff, joint secretary at the India Bullion and Jewellers Association Ltd., said Monday. The goods and services tax, to be implemented from July 1, will replace more than a dozen domestic levies including excise tax and state tariffs, drawing India for the first time into a common market.

Gold consumption in the country is recovering after plunging to a seven-year low of 666 metric tons in 2016. Buyers who stayed away after the government crackdown on black money last year are returning as cash supply improves and domestic prices remain stable.

“Organized players will become healthier in the longer run after this tax is implemented,” Shroff said by phone from Mumbai. In the short term, there may be some problems as jewelers try to implement the new tax and smaller ones may be forced to close because they can’t conform to the new rules, he said.

Over the next two to three years, the new tax should gradually force smaller, unregulated players to become tax compliant and take away their price advantage, increasing market share for bigger, organized businesses, Credit Suisse Group AG analysts Arnab Mitra and Rohit Kadam said in a note Monday.

The total tax on gold remains elevated as the metal also attracts a 10 percent import duty, and this will continue to impact the jewelry industry, P.R. Somasundaram, managing director for World Gold Council India, said in a statement at the weekend. The government should cut the import tax so that unauthorized imports are totally eliminated, he said. — Neal Bhai Reports