The Indian government raised the import duty on gold and silver from six percent [1] to 15 percent [2] effective Wednesday, May 13, 2026.
This policy shift aims to stabilize the national economy by reducing the reliance on precious metal imports. By increasing the cost of entry for these commodities, the government seeks to protect foreign-exchange reserves and support a weakening rupee.
The new tax structure consists of a 10 percent Basic Customs Duty and a five percent Agriculture Infrastructure and Development Cess [2]. This combined rate replaces the previous six percent duty [1] following a notification issued by the Ministry of Finance on May 12.
Officials said the move is necessary to address a widening trade deficit. Gold and silver are high-value imports that significantly impact the current account deficit when demand surges—a trend the government is now attempting to reverse through fiscal measures.
The hike is expected to increase the domestic price of jewelry and bullion. Because India is one of the world's largest consumers of gold, the increase in import costs typically transfers directly to the end consumer.
The Customs Department of the Ministry of Finance is overseeing the implementation of the new rates across all ports of entry. The measure takes effect immediately to prevent a surge in imports ahead of the new pricing structure.
“The Indian government raised the import duty on gold and silver from 6% to 15%.”
This duty hike is a strategic macroeconomic tool used by India to manage its balance of payments. By making imports more expensive, the government intends to reduce the outflow of foreign currency, thereby easing pressure on the rupee and narrowing the trade gap. However, this often leads to higher retail prices for consumers and can potentially incentivize the growth of an unregulated grey market for gold smuggling.
