India Hikes Gold and Silver Import Duty to 15%

The Finance Ministry announced late on May 12 that import duty on gold and silver will increase to an effective rate of 15% from 6%, taking effect at midnight. The new rate combines a 10% basic customs duty with a 5% Agriculture Infrastructure and Development Cess and applies to imports of gold and other precious metals.

The notification reverses a July 2024 decision that had lowered the effective rate to 6%. The higher levy increases customs charges at the point of entry for traders, bullion dealers and consumers importing bullion, coins and other precious-metal products.

Prime Minister Narendra Modi had earlier appealed to citizens to pause gold purchases for a year and to reduce fuel use, resume remote work where possible and limit nonessential travel as part of measures to ease economic strain linked to the conflict in Iran and higher global energy costs.

India relies heavily on imports for its gold supply because domestic mining is limited. According to the World Gold Council, monthly imports averaged about 83 tonnes in January and February 2026, up from a monthly average of 53 tonnes in 2025. The council reported total gold demand in the first quarter rose 10% year-on-year to 151 tonnes and that demand in value terms surged 99% year-on-year to INR2,275 billion (about US$25 billion). Investment demand totaled 82 tonnes, driven by bars, coins and ETFs, while jewellery demand was 66 tonnes and industrial demand 2 tonnes.

The rupee has weakened nearly 5% since late February and hit a record low of 95.7375 to the dollar, adding pressure to import costs. Officials have pointed to disruptions in the Strait of Hormuz and wider geopolitical tensions as factors affecting trade flows and the currency.

Gold and silver accounted for nearly 11% of India’s total imports in fiscal 2026, and the country’s trade deficit widened to $330 billion. The Finance Ministry’s notification did not specify an end date for the higher duty, leaving the 15% rate in place until further policy action.

Indian jewellery shares moved lower earlier in the week as investors reacted to the prime minister’s appeal and broader market concerns; stocks including Titan, Senco Gold and Kalyan Jewellers recorded losses ahead of the tariff announcement.