Gold and Silver Import Duty Raised to 15%: What the Hike Means for Buyers, Jewellers and India’s Economy

Mumbai | 14 May 2026 

India has raised the effective import duty on gold and silver to 15%, up from 6%, in a move aimed at curbing dollar outflows and protecting foreign exchange reserves. The hike took effect on 13 May 2026 through Customs Notification No. 16/2026 issued by the Ministry of Finance. The revised structure includes a 10% Basic Customs Duty and a 5% Agriculture Infrastructure and Development Cess. The decision partially reverses the 2024-25 Budget cut that had lowered the gold import duty to 6%. 

The duty hike comes days after Prime Minister Narendra Modi urged citizens to postpone gold purchases, reduce fuel consumption and avoid unnecessary foreign travel to help conserve foreign exchange reserves as oil prices remain elevated. 

Why Has India Raised the Gold Import Duty? 

The hike addresses pressure on India’s external finances. The country is the world’s second-largest gold consumer after China and imports nearly all the gold it consumes, paid for in US dollars. 

India’s gold imports rose more than 24% to a record $71.98 billion in FY26, even as import volumes fell. Soaring global gold prices drove the increase. Gold imports accounted for 9-10% of India’s total import bill in 2025-26. 

At the same time, the rupee hit a record low against the US dollar this week. The Strait of Hormuz disruption has raised concerns over crude oil and LPG supplies, both of which India depends on heavily for energy needs. 

Chief Economic Advisor V Anantha Nageswaran described the West Asia crisis as a “live balance of payments stress test” with implications for inflation, the current account and the exchange rate. 

What Is the New Gold and Silver Duty Structure? 

The notification also revises duties on jewellery findings and certain industrial inputs. Concessional rates of 4.35% to 5% apply to recycling and recovery categories such as spent catalysts and ash containing precious metals, signalling a push toward recycling over fresh imports. 

How Will the Duty Hike Affect Buyers and Jewellers? 

Retail jewellery prices will rise quickly as the higher landed cost passes through to consumers. Jewellers expect many households to postpone fresh purchases, exchange old jewellery or shift toward lighter-weight products. 

Organised jewellers are likely to push gold exchange programmes, recycled gold and monetisation schemes more aggressively. Malabar Gold & Diamonds has submitted a proposal to the Government of India recommending enhancements to the Gold Monetisation Scheme (GMS). The proposal, submitted by Chairman MP Ahammad to Finance Minister Nirmala Sitharaman and Commerce and Industry Minister Piyush Goyal, recommends lower minimum deposit requirements, easier e-KYC, flexible redemption options and greater participation by organised jewellers. 

India is estimated to hold 25,000 to 35,000 tonnes of privately owned gold, much of which remains economically idle. 

Outlook 

The duty hike signals that the government is prioritising macroeconomic stability and foreign exchange conservation in the near term. The duration of the West Asia conflict and the trajectory of oil prices will shape further policy steps. 

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