India has increased tariffs on gold and silver imports to 15% to curb rising imports, support the rupee, and address economic pressures linked to trade deficits and currency stability. According to the World Gold Council, inflows into India’s gold exchange-traded funds (ETFs) jumped 186 percent year-on-year in the March quarter to a record 20 metric tonnes.
The government on Wednesday (May 13, 2026) sharply raised import duties on gold and silver to 15 percent from 6 percent. The Center imposed a 10 percent basic customs duty, along with a 5 percent Agriculture Infrastructure and Development Cess (AIDC).
“As expected, the government has raised duties to curb the current account deficit. However, this could affect demand, as gold and silver prices were already high,” said Surendra Mehta, national secretary at the India Bullion and Jewelers Association.
The objective of the move is to decrease India's trade deficit. A trade deficit occurs when a country imports more goods than it exports. The Indian economy faces economic challenges because it must spend large sums on importing crude oil, gold, and electronics.
Reuters reported that higher duties would reduce India's trade deficit but decrease demand for precious metals in the short term. Industry leaders have argued that mobilizing idle domestic gold through recycling and monetization schemes could provide a long-term solution.
The Indian rupee has hit an all-time low of 95.75 per dollar. The duty hike is also viewed as an attempt to support the Indian rupee, which has recently come under heavy pressure. Rising imports of expensive commodities, such as crude oil and gold, increase demand for dollars in the domestic market. By discouraging non-essential imports like gold, the government may be aiming to reduce dollar outflows and stabilize the currency.
Forex market participants also interpreted the Prime Minister’s recent remarks on reducing imports and conserving fuel as a signal that India’s balance-of-payments situation could be under pressure if global crude prices remain elevated for an extended period.
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PM Modi on Sunday (May 10, 2026) urged Indians to adopt practical measures to combat the ongoing Iran-US conflict and rising global crude oil prices. The Prime Minister proposed avoiding the purchase of gold for a year, postponing all non-essential foreign travel, and reintroducing work-from-home arrangements.
The remarks came at a time when multiple countries recorded their highest-ever fuel prices. The current period has provided Indians with protection against price rises, yet people continue to worry about upcoming price increases.