Govt Raises Gold, Silver Import Duty To 15% To Curb Imports, Save Forex

New Delhi, May 13 (KNN) The Ministry of Finance on Wednesday raised import duties on gold and silver to 15 percent from 6 percent as part of a broader strategy to curb precious metal imports and conserve foreign exchange reserves amid mounting pressure from the ongoing West Asia crisis.

According to a notification issued by the finance ministry, the revised levy includes a 10 percent basic customs duty along with a 5 percent Agriculture Infrastructure and Development Cess (AIDC), taking the effective import duty on gold and silver to 15 percent from May 13. 

Gold, Silver Import Duty Raised To 15% 

The move follows rising concerns over India’s widening import bill, driven by elevated crude oil prices and geopolitical tensions in West Asia.

India, the world’s second-largest consumer of gold after China, relies heavily on imports to meet domestic demand. Gold imports surged 24 percent to a record USD 71.98 billion in 2025-26, adding pressure on the country’s trade deficit and foreign exchange reserves. 

Demand for gold has remained strong, particularly from investors amid rising bullion prices and weaker returns from equity markets over the past year.

The decision also comes days after Prime Minister Narendra Modi urged citizens to adopt austerity measures to conserve foreign exchange. He advised people to postpone gold purchases, reduce non-essential imports and cut fuel consumption to ease pressure on the economy.

Jewellery Demand May Slow, Gold Financiers Could Benefit 

Market experts said the move is expected to impact domestic bullion prices and could temporarily weaken demand for jewellery and retail gold purchases.

Sumit Singhania, Research Head, Bajaj Broking said the hike in import tariffs on gold, silver and other precious metals is aimed at reducing imports, conserving forex reserves, supporting the rupee and narrowing the trade deficit amid Middle East-related economic pressures.

He said higher duties may hurt jewellery firms such as Titan Company, Kalyan Jewellers and Sky Gold & Diamonds by dampening discretionary demand. 

However, gold financiers like Muthoot Finance and Manappuram Finance could benefit from higher collateral values, while precious metal futures on the Multi Commodity Exchange of India rose around 6 percent after the announcement.

Short-Term Price Spike, Long-Term Bullish Outlook For Gold 

Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, said the hike in customs duty on gold and silver from 6 percent to 15 percent is a calibrated step to ease forex pressures amid global uncertainty. 

He said the rise in domestic prices is a one-time adjustment to higher import costs, with future prices continuing to depend on global rates, USD/INR movements and domestic premiums.

Maintaining a bullish long-term outlook, Banerjee cited de-dollarisation, central bank buying and hedging demand as key drivers, projecting international gold could reach USD 6,000 per ounce over the next 12–18 months, with silver also likely to benefit. 

He added that while elevated crude prices and West Asia tensions are pressuring the rupee, RBI intervention and lower gold imports could help contain further weakness.

(KNN Bureau)