The Indian government has increased the effective import duty on gold and silver from 6% to 15%, aiming to curb non-essential imports and protect foreign exchange reserves amid rising global economic pressures and the West Asia crisis. The revised structure includes a 10% Basic Customs Duty and a 5% Agriculture Infrastructure and Development Cess (AIDC).
According to officials, the move is intended to reduce pressure on the rupee and limit the widening current account deficit. Prime Minister Narendra Modi had recently urged citizens to avoid unnecessary gold purchases, foreign travel, and excessive fuel consumption as part of austerity measures to conserve foreign exchange.
The duty hike has already pushed domestic gold and silver prices sharply higher. Reports suggest that gold prices on the Multi Commodity Exchange surged after the announcement, while major jewellery brands increased retail rates. Market analysts say the higher tariffs could reduce official imports but may also revive gold smuggling and expand grey-market trading.
India is the world’s second-largest consumer of gold and relies heavily on imports to meet demand. Experts believe that despite the steep rise in duties, demand for gold and silver may remain resilient because of their cultural importance, especially during weddings and festivals, and their role as investment assets. However, smaller jewellers and bullion traders may face margin pressure in the short term.
The revised duties took effect from May 13, 2026, through notifications issued by the Finance Ministry. In addition to bullion, duties on gold and silver jewellery findings were also increased, while platinum imports now attract an effective duty of 15.4%.
