The Indian government increased the effective import tax on gold and silver to 15% in late March 2026 [1].
This policy shift directly impacts the cost of precious metals for millions of consumers and jewelers. Because India is one of the world's largest consumers of gold, higher import costs typically lead to immediate price spikes in the domestic market.
The new tax structure consists of a basic customs duty raised to 10% from a previous five percent, supplemented by a five percent Agriculture Infrastructure and Development Cess [1]. This combined increase has pushed the total effective import tax to 15% [1].
Market reactions were immediate. Gold prices rose above ₹1.45 lakh per 10 grams [2]. Silver prices also saw a significant jump, increasing by ₹8,000 per kilogram [2].
Analysts have offered differing views on the primary drivers of this price surge. Some reports link the increase directly to the customs duty hike [1]. Other analysts said the rise was driven by a weak U.S. dollar and gains in international bullion prices [2].
The ripple effects of the duty increase extended beyond the commodities market. The Bombay Stock Exchange experienced a rally, with share prices hitting record highs for two straight sessions following the announcement of the duty hike [1].
“The total effective import tax on gold and silver reached 15%.”
The simultaneous impact of higher domestic taxes and volatile international bullion prices creates a high-cost environment for Indian consumers. By increasing the customs duty, the government may be attempting to curb gold imports to reduce the current account deficit, though this often results in higher retail prices and potential increases in smuggled gold.
