New Delhi, May 13: The Ministry of Finance on Wednesday increased the import duty on gold and silver to 15 per cent from the existing 6 per cent, in a move aimed at curbing non-essential imports and conserving foreign exchange reserves amid mounting global economic pressures linked to the ongoing West Asia crisis.
The revised duty structure came into effect on May 13 through an official notification issued by the finance ministry. The changes include an increase in the social welfare surcharge and the agriculture infrastructure and development cess on imports of precious metals.
The decision comes days after Prime Minister Narendra Modi appealed to citizens to postpone gold purchases and adopt austerity measures to ease pressure on the country’s foreign exchange reserves amid escalating geopolitical tensions in West Asia.
India’s gold imports rose by more than 24 per cent to a record USD 71.98 billion during the 2025–26 financial year, despite import volumes declining by 4.76 per cent to 721.03 tonnes, largely because of soaring international prices.
Gold and silver prices have witnessed a sharp surge over the past year. In the national capital, gold prices climbed by Rs 1,500 on Tuesday to reach Rs 1,56,800 per 10 grams, while silver prices jumped by Rs 12,000 to Rs 2,77,000 per kilogram.
The Centre had earlier reduced customs duty on gold to 6 per cent in the Union Budget for 2024–25 to support the domestic gems and jewellery sector, curb smuggling and make precious metals more affordable. However, the latest increase marks a policy reversal amid concerns over the widening import bill and rising external sector pressures.
Earlier this week, Chief Economic Adviser V. Anantha Nageswaran described the ongoing West Asia conflict as a “live balance of payments stress test” and warned about its possible impact on inflation, the current account deficit and the rupee’s exchange rate.
The strain on the economy has also been reflected in the currency market, with the Indian rupee touching a record low against the US dollar on Tuesday.
India, the world’s second-largest consumer of gold after China, remains heavily dependent on imports of precious metals, driven primarily by demand from the jewellery industry. The latest move by the government is being viewed as part of broader efforts to manage foreign exchange outflows as the country simultaneously faces elevated oil and fertiliser import costs due to the continuing conflict in West Asia.
