India Hikes Gold, Silver Import Duties to 15% in Bid to reinforce Rupee

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New Delhi: The Indian Ministry of Finance has increased the effective import duty of gold and silver rates to 15% from 6% effective from May 13, 2026 as pressure on the nation's external finances increases and the government takes steps to support the declining rupee and reduce rising bullion imports.

The updated tariff structure includes a 5% Agriculture Infrastructure and Development Cess (AIDC) and a 10% basic customs duty, according to a government notification released on Tuesday. Previously, the effective duty was approximately 6%.
The decision is made on the basis of recent announcement by the Prime Minister Narendra Modi to stop purchasing of gold for one year as well as the trade deficit of India is growing due to hike in crude oil and greater volatility in the world market.
According to officials, the increased taxes are intended to limit non-essential imports, preserve foreign exchange reserves, and stabilise the national currency.

Following the action, market analysts predict that domestic gold and silver prices will increase, which might reduce demand for jewellery and retail investment purchases in the upcoming months. Additionally, industry analysts have warned that significantly higher tariffs may lead to a revival of gold smuggling, a problem that India has historically faced when import levies are high.

Following the news, the rupee saw slight increases, but bullion dealers and jewellery associations voiced worries about how the announcement would affect consumer demand and the larger gem and jewellery industry.