The move aims to curb overseas purchases of precious metals and reduce pressure on India’s trade deficit and forex reserves.
India increased import duties on gold and silver to 15% from 6%, combining a 10% basic customs duty and a 5% agriculture infrastructure levy. The government aims to narrow the trade deficit and support the rupee amid forex reserve pressures.
Prior to the hike, gold imports had already fallen to a near 30-year low in April due to a 3% goods and services tax on bullion. Indian gold ETF inflows surged 186% year-on-year in the March quarter, reaching a record 20 metric tons.
Industry officials warned the higher tariffs could revive smuggling networks, which had declined after a mid-2024 duty reduction. Prime Minister Narendra Modi urged citizens to avoid gold purchases for a year to protect foreign exchange reserves.