India Raises Gold Import Duty to 15% as Rising Bullion Costs Pressure Forex Reserves

India Increases Gold and Silver Import Duties

India has raised import tariffs on:

• Gold
• Silver
• Platinum
• Precious metal dore imports

The revised import duty structure now stands at:

• 10% Basic Customs Duty
• 5% Agriculture Infrastructure and Development Cess (AIDC)

Total effective duty:

• 15%

The changes came into effect from midnight on Wednesday.

Government Aims to Protect Forex Reserves

The decision comes amid growing concern over:

• Rising gold import bills
• Pressure on India’s foreign exchange reserves
• Increasing global geopolitical instability
• Elevated oil prices linked to Middle East tensions

Officials described the tariff hike as a:

• “Carefully calibrated intervention” designed to:
• Reduce non-essential imports
• Protect macroeconomic stability
• Ease pressure on the current account deficit

Gold Prices and Imports Have Surged Sharply

According to government data:

• India’s gold import bill rose 24.1% in FY26
• Imports reached approximately $71.97 billion
• Previous year imports stood at $58 billion

Despite higher import value:

• Physical import volume actually declined
• Gold imports fell from 757 tonnes to 721 tonnes

Analysts say soaring international gold prices inflated the overall import bill significantly.

Gold Futures and Silver Futures Jump

Following the announcement:

• Domestic gold futures surged 7.2%
• Gold futures reached 164,497 rupees per 10 grams

Silver futures:

• Jumped 8%
• Reached 301,429 rupees per kilogram

The market reacted strongly as traders anticipated:

• Reduced imports
• Higher domestic bullion prices
• Possible supply tightening

Modi Earlier Urged Indians to Avoid Gold Purchases

Narendra Modi had recently urged citizens to:

• Delay discretionary gold purchases for one year
• Reduce pressure on foreign reserves
• Invest savings into productive financial assets

The government views gold imports as a major contributor to:

• Trade deficits
• Currency pressure
• External economic vulnerabilities

Gold remains India’s:

• Second-largest import item after crude oil

Jewellery Demand Could Slow

Industry analysts believe the higher import duties may:

• Reduce jewellery demand temporarily
• Increase domestic bullion premiums
• Encourage gold recycling
• Boost unofficial inflows and smuggling risks

Consumers may increasingly shift toward:

• Sovereign Gold Bonds
• Gold ETFs
• Digital gold products
• Financial investment alternatives

Global Uncertainty Driving Safe-Haven Gold Demand

Gold prices have climbed over:

• 40% in the past year

Major reasons include:

• Middle East geopolitical tensions
• Global economic slowdown fears
• Central bank buying
• Investor movement toward safe-haven assets

The stronger US dollar and volatile oil prices are also putting additional pressure on emerging economies like India.

Key Highlights

• India raises gold and silver import duty to 15%
• Gold futures jump over 7%
• Silver futures rise 8%
• Gold import bill surged to nearly $72 billion
• Government aims to protect forex reserves
• Jewellery demand may weaken temporarily
• Investors may shift toward ETFs and sovereign gold bonds