India hikes gold, silver import duty to 15% to curb soaring import bill

The government on Wednesday hiked import duties on gold and silver to 15 per cent from 6 per cent as part of measures to curb inbound shipments of precious metals amid a rising import bill due to the West Asia crisis. Days after Prime Minister Narendra Modi's clarion call for curbs on gold purchases, along with other austerity measures to save on foreign exchange, the Finance Ministry, in a notification, hiked the social welfare surcharge (SWS) and the agriculture infrastructure and development cess (AIDC), effective May 13. The duty hikes will raise the overall customs duty on gold to 15 per cent. India's gold imports surged more than 24 per cent to an all-time high of USD 71.98 billion in 2025-26. In volume terms, however, the shipments dipped 4.76 per cent to 721.03 tonnes in 2025-26.

The prices of gold have risen from USD 76,617.48/KG in FY25 to USD 99,825.38/KG in FY26. In the national capital, the price of gold increased by Rs 1,500, or nearly 1 per cent, to Rs 1,56,800 per 10 grams on Tuesday from Monday's closing level of Rs 1,55,300 per 10 grams. Silver prices also advanced by Rs 12,000, or 4.53 per cent, to Rs 2,77,000 per kg. In the international market, spot gold slipped USD 42.33, or 1 per cent, to USD 4,692.64 per ounce while silver fell 3.04 per cent to USD 83.49 per ounce. The government in the 2024-25 budget had cut customs duty on gold to 6 per cent to boost the domestic gems and jewellery industry, curb illegal smuggling, and bring down local prices. India had, in 2022, raised gold import tax to 15 per cent to check CAD (capital account deficit) amid a falling rupee due to the Russia-Ukraine war that began in February 2022. India is the world's second-biggest gold consumer after China. The imports are largely driven by the jewellery industry.

Chief Economic Advisor V Anantha Nageswaran, on Tuesday, said that the ongoing West Asia crisis is a "live balance of payments stress test", with direct consequences for inflation, the current account, and the exchange rate. BoP (balance of payment) is the difference between inflows into and outflows of foreign exchange from the country in a particular period of time. The Indian rupee hit a record low of 95.63 against the US dollar on Tuesday. Modi, on Sunday, called for judicious use of fuel, postponement of gold purchases and foreign travel, among other measures, to conserve foreign exchange amid the West Asia crisis. Addressing a rally organised by the Telangana BJP in Hyderabad, he suggested reducing petrol and diesel consumption, using metro rail services in cities, carpooling, increased use of electric vehicles (EVs), utilising railway services for parcel movement, and working from home to conserve foreign exchange amid the crisis in West Asia. India is already battling a high import bill from oil and fertiliser due to the US-Iran war, which has been ongoing for the last 10 weeks, leading to the effective closure of the Strait of Hormuz. India imports 60 per cent of its LPG usage, and of that, 90 per cent flows through the now-closed Strait of Hormuz.