The government on Wednesday raised import duties on gold and silver to 15% from 6% as part of a broader effort to curb rising imports of precious metals and conserve foreign exchange amid mounting pressure from the West Asia crisis.
In a notification issued by the finance ministry, the government increased the social welfare surcharge (SWS) and the agriculture infrastructure and development cess (AIDC), pushing the effective customs duty on gold and silver from 6% to 15% from May 13.
Import duty on platinum has also been raised from 6.4% to 15.4%. The government has also made corresponding changes in duties on related products, including gold and silver dore, coins and jewellery findings.
The move comes days after Prime Minister Narendra Modi urged citizens to postpone gold purchases and reduce non-essential imports to help ease pressure on India’s foreign exchange reserves.
Earlier on Sunday, PM Modi appealed to citizens to adopt austerity measures to help conserve foreign exchange during the crisis. He called for “judicious use of fuel” and advised people to postpone gold purchases and foreign travel wherever possible.
The PM also suggested reducing petrol and diesel consumption, increasing the use of metro rail services, carpooling, electric vehicles and railway transport to reduce pressure on imports.
The move comes amid growing concerns within the government over India’s swelling import bill, widening current account deficit (CAD) and rising external sector vulnerabilities as geopolitical tensions in West Asia keep commodity prices elevated.
India imports nearly all the gold it consumes, making bullion purchases a significant drain on foreign exchange reserves whenever domestic demand surges.
The country’s gold imports rose more than 24 per cent to a record $71.98 billion in 2025-26, compared with $58 billion in the previous fiscal year, according to commerce ministry data. Imports stood at $45.54 billion in 2023-24 and around $35 billion in 2022-23.
Although import volumes declined 4.76 per cent to 721.03 tonnes in 2025-26 from 757.09 tonnes a year earlier, the sharp increase in international gold prices sharply inflated India’s overall import bill.
Gold prices climbed from $76,617.48 per kilogram in FY25 to $99,825.38 per kilogram in FY26. In Delhi’s retail market, prices are now hovering around Rs 1.5 lakh per 10 grams after breaching the Rs 1 lakh mark for the first time last year.
Analysts said the surge in bullion imports has emerged as a key concern for policymakers because it directly affects India’s trade deficit and puts additional pressure on the rupee, which has remained among Asia’s weakest-performing currencies this year.
India’s merchandise trade deficit widened to $333.2 billion during 2025-26, while gold alone accounted for more than 9 per cent of the country’s total imports worth $775 billion.
The Reserve Bank of India had earlier warned of rising pressure on the current account deficit. RBI data released in March showed India’s CAD widened to $13.2 billion, or 1.3 per cent of GDP, in the December quarter, compared with $11.3 billion a year earlier, largely due to a higher trade deficit.
Duty hike aims to curb bullion imports
Government officials believe reducing bullion imports could help stabilise the rupee and preserve foreign exchange reserves at a time when India is also dealing with volatile crude oil prices and persistent global financial uncertainty.
India has already taken multiple steps in recent weeks to slow bullion inflows. Authorities earlier imposed a 3 per cent integrated goods and services tax (IGST) on gold and silver imports, prompting banks to temporarily suspend imports for more than a month.
As a result, April gold imports plunged to near 30-year lows. Although banks later resumed imports after paying the IGST, bullion dealers now expect another sharp decline in imports following the latest tariff hike.
Demand for gold in India has surged over the past year, particularly from investors seeking safe-haven assets amid volatile equity markets and geopolitical tensions.
According to the World Gold Council, inflows into India’s gold exchange-traded funds (ETFs) jumped 186 per cent year-on-year in the March quarter to a record 20 metric tonnes.
The government has additionally modified concessional duty provisions for imports of spent catalysts or ash containing precious metals used for recovery and recycling. Such imports will now attract a concessional customs duty of 4.35 per cent subject to compliance conditions.
India has also tightened concessional duty provisions for gold imports from the United Arab Emirates under the fixed-quantity quota system that earlier enjoyed lower tariff rates.
Switzerland remains India’s biggest source of gold imports with nearly a 40 per cent share, followed by the United Arab Emirates at over 16 per cent and South Africa at around 10 per cent.
