The Indian government has increased the import duty on gold and silver from 6% to 15% [1].
This policy shift aims to stabilize the national economy by reducing the reliance on expensive foreign imports. By making precious metals more costly to bring into the country, the administration intends to protect its foreign-exchange reserves from excessive depletion.
According to government data, gold imports surged more than 24% to $71.98 billion in FY 2025-26 [2]. This significant increase in spending on non-essential goods has put pressure on the country's financial buffers, a trend the Modi administration is now attempting to reverse.
The hike follows an appeal from the prime minister to curb the inflow of non-essential imports [1]. The move is designed to discourage the high-volume import of gold and silver, which are often viewed as luxury or investment assets rather than industrial necessities.
Officials said the primary objective is to save foreign-exchange reserves [2]. The increase from 6% to 15% [1] represents a more than twofold rise in the cost of importing these metals, which is expected to impact both industrial buyers and retail consumers.
Market analysts said such measures are often used to manage the current account deficit. By raising the barrier to entry for precious metals, the government seeks to align import levels with the country's broader economic goals for the current fiscal period.
“The Indian government has increased the import duty on gold and silver from 6% to 15%”
This policy adjustment reflects India's strategic priority to maintain a healthy balance of payments. By targeting gold and silver, the government is addressing a specific leak in foreign-exchange reserves caused by high domestic demand for precious metals. If successful, the duty hike will lower the trade deficit and reduce the volatility of the rupee against major currencies, though it may lead to higher retail prices for jewelry and silver products within the domestic market.
