The Indian government increased import duties on gold and silver starting May 13, 2026, to reduce bullion imports [1, 2].
As the world’s second-largest gold market, India's trade policies significantly impact global bullion demand. This move aims to arrest the slide of the Indian rupee by reducing the amount of foreign currency leaving the country to pay for precious metal imports [1, 3].
Under the new regulations, the basic customs duty on gold and silver has been raised to 10% from five percent [1]. This adjustment doubles the primary tax burden on importers bringing these metals into the country.
In addition to the customs duty, the government increased the Agriculture Infrastructure and Development Cess [2]. This specific levy rose to five percent from one percent [2]. The combined effect of these two hikes increases the total cost of importing bullion, which typically leads to higher domestic prices for consumers, and jewelers.
Government officials said these changes are effective May 13, 2026 [1, 2]. The strategy focuses on curbing the current account deficit by making imports more expensive, a common tool used by the administration to manage currency volatility.
Industry analysts said such measures often lead to a temporary dip in legal imports while increasing the incentive for smuggling. However, the immediate priority for the government remains the stabilization of the rupee against major global currencies [1, 3].
“India's trade policies significantly impact global bullion demand.”
This policy shift indicates that the Indian government is prioritizing macroeconomic stability and currency protection over the affordability of precious metals. By increasing the cost of legal imports, India is attempting to reduce its reliance on foreign bullion, which may strengthen the rupee but could also drive a surge in the illicit gray market for gold and silver.
