India has announced a major increase in the import duty on gold and silver. The Government of India has raised the effective customs duty on these precious metals from 6% to 15%, effective from 13 May 2026. This decision is expected to impact gold prices, Jewellery costs, bullion markets, and imports across the country.
Government Increases Import Duty on Gold & Silver
According to notifications issued by the Ministry of Finance, India has increased the customs duty on:
- Gold
- Silver
- Platinum
- Related precious metal products
The revised rates became applicable from 13 May 2026.
New Import Duty Structure
Component | Earlier Rate | New Rate |
Basic Customs Duty (BCD) | 5% | 10% |
Agriculture Infrastructure & Development Cess (AIDC) | 1% | 5% |
Total Effective Duty | 6% | 15% |
For platinum, the effective duty has increased from 6.4% to 15.4%.
Why Did the Government Increase Duty?
The government has increased import duty mainly to:
- Reduce non-essential imports
- Protect foreign exchange reserves
- Control trade deficit
- Support the Indian Rupee during global economic uncertainty
Reports indicate that rising crude oil prices and geopolitical tensions in West Asia have increased pressure on India’s import bill.
Impact on Gold & Silver Prices
1. Jewellery Prices May Rise
Higher import duty increases the landed cost of imported gold and silver, which can raise jewellery prices in India.
2. Increased Market Volatility
After the announcement, gold futures surged sharply, while physical market demand temporarily slowed.
3. Pressure on Jewellery Industry
Small jewellers and bullion traders may face margin pressure due to higher procurement costs.
Impact on Common People
Wedding Buyers
Families planning weddings may have to spend more on gold jewellery purchases.
Investors
Gold ETFs and bullion investments may remain attractive because gold is still viewed as a safe-haven asset during uncertain economic conditions.
Silver Users
Industries using silver in electronics, solar equipment, and manufacturing may face higher input costs.
Risk of Gold Smuggling
Experts and bullion traders have warned that a sharp increase in customs duty may increase gold smuggling activities because illegal imports become more profitable when official duty rates are high.
India’s Gold Import Dependence
India is one of the world’s largest consumers of gold and silver. During FY 2025–26:
- Gold imports crossed USD 71 billion
- Gold became one of India’s largest imported commodities after crude oil
This heavy dependence on imports is one of the major reasons behind the government’s policy action.
Key Takeaways
- Import duty on gold and silver increased from 6% to 15%
- Effective from 13 May 2026
- Basic Customs Duty increased to 10%
- AIDC increased to 5%
- Jewellery and bullion prices may rise
- Government aims to reduce imports and protect forex reserves
Conclusion
The increase in import duty on gold and silver is one of the biggest policy changes in the precious metals sector in recent years. While the move may help reduce imports and protect India’s foreign exchange reserves, it could also make gold and silver more expensive for consumers.
Investors, jewellers, traders, and buyers should closely monitor market prices and future government notifications before making major purchase decisions.
For more finance, tax, and economic updates, keep reading Dhan Shiksha.
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