The Government of India has raised import duties on gold and silver to 15% from 6%, and platinum to 15.4% from 6.4%. The move is meant to curb precious metal imports, ease pressure on foreign exchange reserves, and support the rupee. The new import duty structure includes a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess on gold and silver imports.
This policy move has a clear macroeconomic purpose; India relies on imports for almost all of its gold consumption, and the government is trying to slow that outflow of foreign currency at a time when the rupee has been under pressure. The higher duties could reduce demand in India, the world’s second-largest consumer of precious metals.
For gold and silver, the effective import duty has gone from 6% to 15%, built from a 10% basic customs duty and 5% AIDC. For platinum, the rate has moved to 15.4% from 6.4%, according to Hindustan Times’ reporting on the government change.
[Also Read: India Clears ₹18,100 Crore Credit Guarantee Scheme for MSMEs and Others ]
Why does the government raise gold and silver import duties to 15%
Gold and silver imports consume dollars, and large bullion imports can widen the current account deficit and strain foreign exchange reserves. The government’s aim is to curb overseas purchases and ease pressure on reserves, also to support the Indian rupee, which has been among Asia’s weaker currencies.
There is also a demand-side angle to this rise in import duties. The gold demand in India has been rising, especially for investment purposes. Even as prices stayed high, equity returns disappointed many investors.
The World Gold Council said gold ETF inflows in India surged 186% year-on-year in the March quarter to a record 20 metric tons, a sign that investor appetite remained firm despite elevated prices.
[Also Read: Paytm Payments Bank Shutdown: Impact on Digital Wallets, FASTag, and UPI Users ]
What does it mean for common people?
For ordinary buyers, the immediate effect is a higher landed cost, which usually filters through to jewellery prices and bullion rates. In a market where gold is not only an investment product, but also a part of weddings, festivals, occasions and household savings. If import costs stay elevated, buyers are likely to face higher retail prices or lower making-volume at the same budget. That is a market inference from the duty hike itself, and it follows the pricing mechanism.
The impact will be sharper for families planning large purchases; higher duties do not just affect luxury demand; they also affect middle-class buyers who treat gold as a store of value. The banks had already halted imports for more than a month after the government began levying a 3% IGST on gold and silver imports, and that April imports fell to a near 30-year low before banks resumed shipments.
Impact on the economy
For the Indian economy, on one side, lower official imports can help reduce pressure on the trade deficit and protect foreign exchange reserves, which is what policymakers want. On the other side, a risk of smuggling if the legal channel becomes too expensive. That would weaken the policy’s effectiveness and shift volume from formal trade to grey markets instead.
[Also Read: India AI Impact Summit 2026 officially begins today at Bharat Mandapam in New Delhi ]
The Indian Government is prioritising macro stability instead of short-term consumer affordability. In the short term, the policy should reduce import appetite and may offer some support to the Indian rupee. But if domestic demand stays strong, the market may simply shift to higher local premiums, informal routes, or delayed purchases rather than disappear.
The current import duty hike also stands in contrast to the government’s July 2024 move, when the Finance Ministry cut customs duties on gold and silver from 15% to 6% and on platinum from 15.4% to 6.4% to support domestic value addition in jewellery manufacturing.
Maybe the current move is not a permanent policy, but a reversal driven by current foreign-exchange stress and import concerns.
[Also Read: State Bank of India Introduces USD 500 Million Social Loan Initiative for Women]
With raised import duty on gold and silver, the government is trying to slow bullion imports, support the rupee, and protect reserves. For consumers, the result is higher prices. For the economy, the benefit depends on whether the formal import channel slows more than the grey market grows.
