The Government of India increased the import duty on gold, silver, and platinum from six% to 15% effective May 13, 2024 [1].

This policy shift targets a reduction in the country's reliance on precious metal imports to stabilize the national currency. By raising the cost of entry for these metals, the government intends to protect foreign-exchange reserves and prevent drastic price spikes for jewelry during the summer wedding season.

Gold imports in the 2025-2026 fiscal year reached approximately $72 billion [1]. This volume of imports strained foreign-exchange reserves and weakened the rupee, prompting the administration under Prime Minister Narendra Modi to implement the hike [1, 2].

Industry leaders expect the move to dampen consumer demand in the short term. Suvankar Sen, the managing director of Senco Gold, said, "The higher import duty on gold and silver could impact jewelry demand for a year" [2].

Market analysts project that jewelry volumes could drop by 10% to 15% as a result of the increased costs [2]. The measure is designed to temper the market during a period of high seasonal demand, specifically the wedding season, where jewelry consumption typically peaks.

The government's decision reflects a broader strategy to manage the current account deficit. By curbing the inflow of expensive metals, India seeks to balance its trade ledger while maintaining a steady supply of precious metals for the domestic market [1, 2].

“The Government of India increased the import duty on gold, silver, and platinum from six% to 15%.”

This duty hike represents a strategic intervention to prioritize macroeconomic stability over consumer affordability. By aggressively raising tariffs, India is attempting to decouple its domestic jewelry market from volatile global import trends to prevent the rupee from further depreciation against the dollar.