NEW DELHI, MAY 13 : The Centre on Wednesday increased import duties on gold and silver to 15 per cent from 6 per cent as part of efforts to curb rising imports of precious metals amid mounting pressure on India’s foreign exchange reserves due to the ongoing West Asia crisis.
The Finance Ministry, through a notification issued on May 13, raised the Social Welfare Surcharge (SWS) and Agriculture Infrastructure and Development Cess (AIDC), effectively pushing the overall customs duty on gold to 15 per cent.
The move comes days after Prime Minister Narendra Modi appealed for restraint in gold purchases and urged citizens to adopt austerity measures to conserve foreign exchange reserves.
India’s gold imports surged over 24 per cent to a record USD 71.98 billion in 2025-26, though import volumes declined by 4.76 per cent to 721.03 tonnes during the same period. Gold prices also witnessed a sharp rise, climbing from USD 76,617.48 per kg in FY25 to USD 99,825.38 per kg in FY26.
In the national capital, gold prices jumped by Rs 1,500 to Rs 1,56,800 per 10 grams on Tuesday, up from Rs 1,55,300 a day earlier. Silver prices rose sharply by Rs 12,000 to Rs 2,77,000 per kg.
However, in the international market, spot gold fell by 1 per cent to USD 4,692.64 per ounce, while silver declined 3.04 per cent to USD 83.49 per ounce.
The government had reduced customs duty on gold to 6 per cent in the 2024-25 Budget to support the domestic gems and jewellery industry and curb smuggling. Earlier, in 2022, India had raised the duty to 15 per cent following the Russia-Ukraine conflict and the resulting pressure on the rupee and current account deficit.
India, the world’s second-largest gold consumer after China, relies heavily on imports to meet domestic demand, particularly from the jewellery sector.
Chief Economic Advisor V Anantha Nageswaran on Tuesday described the ongoing West Asia conflict as a “live balance of payments stress test” with implications for inflation, the current account deficit, and the rupee exchange rate. The Indian rupee hit a record low of 95.63 against the US dollar on Tuesday.
Addressing a rally in Hyderabad on Sunday, Modi urged people to reduce fuel consumption, postpone gold purchases and foreign travel, use metro and railway services, adopt electric vehicles, and opt for carpooling and work-from-home arrangements to conserve foreign exchange.
India is already grappling with a rising import bill for crude oil and fertilisers due to the ongoing US-Iran conflict and the effective closure of the Strait of Hormuz. The country imports nearly 60 per cent of its LPG requirement, with around 90 per cent of those supplies passing through the strategically crucial waterway.
