Will Gold & Silver Prices In India Become Costlier After Govt Hikes Import Tariffs?

India increases gold and silver import duties to 15%, expanding to bullion, jewellery findings and industrial inputs while offering concessions for recycling inputs. The move aims to reduce foreign exchange pressure and temper bullion inflows, with significant implications for prices, manufacturing costs, and external finances.

The Centre has sharply raised taxes on bullion, lifting the combined levy on most gold and silver imports to 15% from 6%. The move, effective 13 May 2026, aims to curb overseas purchases, ease pressure on foreign exchange reserves and cool demand amid global uncertainty.

Under the new structure, importers of standard gold and silver will pay a 10% basic customs duty plus a 5% Agriculture Infrastructure and Development Cess. Similar higher rates will apply to several other precious metals and related products, making incoming shipments more expensive for jewellers and industry.

Gold and silver import duty changes and affected products

The Finance Ministry notification states that the 15% gold and silver import duty will cover bullion, certain platinum imports, jewellery findings and industrial inputs using precious metals. The revised rates replace the earlier 5% basic customs duty, which had kept landed costs relatively low for traders and manufacturers.

Gold imported from the United Arab Emirates under the fixed-quantity quota will also face steeper charges. This quota earlier enjoyed concessional duty, but the government has now increased the applicable rate. Authorities want to close gaps that encouraged heavy buying from the UAE under the softer regime.

Gold and silver import duty backdrop: soaring value of imports

India’s appetite for gold remains strong despite higher costs. The value of gold imports jumped more than 24% to a record $71.98 billion in 2025-26, from $58 billion in 2024-25. Earlier, imports were $45.54 billion in 2023-24 and $35 billion in 2022-23, reflecting a steady rise in spending.

In volume terms, gold imports actually slipped 4.76% to 721.03 tonnes in 2025-26 from 757.09 tonnes a year earlier. The commerce ministry attributes the value surge mainly to prices, with global rates climbing from $76,617.48 per kilogram in FY25 to $99,825.38 per kilogram in FY26.

Will Gold & Silver Prices Become Costlier After Govt Hikes Import Tariffs?

Yes, increasing import tariffs on gold and silver to 15% will make them costlier for consumers in India. This hike from 6% raises the landed cost of imports, which gets passed on through higher domestic prices.

The tariffs consist of a 10% basic customs duty plus 5% Agriculture Infrastructure and Development Cess (AIDC), directly elevating retail prices for gold and silver jewellery, bars, and coins. Jewellers often add premiums, amplifying the effect amid already high global prices, as seen in past hikes that spurred premiums over $100 per ounce.

Jewellers often add premiums, amplifying the effect amid already high global prices, as seen in past hikes that spurred premiums over $100 per ounce.

Jewellers are expected to pass on the cost to the customers. The increase to 15% (from 6%) will pass through to retail levels, as most gold is imported and jewellers factor in the added tax plus GST and making charges.

Gold and silver import duty context: current account and sourcing

The wider trade gap has pushed up the current account deficit. Reserve Bank of India data released on 2 March show the CAD at $13.2 billion, or 1.3% of GDP, in the December quarter, compared with $11.3 billion a year earlier, largely due to the larger merchandise deficit.

India sources most imported gold from a few key suppliers. Switzerland accounts for nearly 40% of shipments, followed by the United Arab Emirates with more than 16% and South Africa at around 10%. These trading links remain central even as the new gold and silver import duty regime seeks to temper inflows.

Gold and silver import duty steps alongside calls for austerity

Against this backdrop, Prime Minister Narendra Modi has urged citizens to cut discretionary spending. Modi has appealed to people to delay gold purchases and limit foreign travel, while also using fuel carefully. The combined policy steps aim to protect the economy from the fallout of the West Asia conflict.

The tighter gold and silver import duty framework, together with appeals for restraint in consumption, shows the government’s concern over external pressures. By raising costs for bullion imports yet offering concessions for recycling, authorities are trying to manage demand while keeping essential industrial uses supported within the existing economic realities.