The Indian government increased the total effective import tax on gold and silver to 15% in March 2026 [1].
This policy shift directly impacts the cost of precious metals for consumers and jewellers across the country. By raising the barrier to imports, the government aims to increase state revenue and curb the volume of gold and silver entering the domestic market [1].
According to the Ministry of Finance and Customs, the basic customs duty on these metals rose from five% to 10% [1]. Additionally, the government introduced a five% Agriculture Infrastructure and Development Cess [1]. These two components combined to create the new 15% total tax rate [1].
The tax hike caused an immediate reaction in the domestic markets. On the Multi Commodity Exchange (MCX), gold prices rose by more than one% on the day the changes were reported [2]. This surge pushed the price of gold above ₹1.45 lakh per 10 grams [2].
Silver experienced similar volatility. The cost of silver increased by ₹8,000 per kilogram [2]. Market analysts said that these price jumps affected several financial hubs, including the Bombay Stock Exchange (BSE) [1].
Domestic jewellers and consumers now face higher costs to acquire raw materials. The move to curb imports often leads to a tighter supply of physical gold, which can further sustain higher price levels in the short term [1].
“The total effective import tax on gold and silver is now 15%”
The increase in import duties serves as a fiscal tool for India to manage its current account deficit by reducing the demand for foreign-sourced gold. However, the immediate consequence is a higher cost of living for consumers and increased overhead for the jewelry industry, which may lead to lower demand or a rise in the circulation of recycled gold.
