Synopsis: India raises gold and silver import duties to 15% to curb non-essential imports, protect forex reserves, and stabilise the economy amid the escalating West Asia crisis.
India has sharply increased import duties on gold and silver to 15 percent from the earlier 6 percent as part of emergency measures aimed at conserving foreign exchange reserves and reducing pressure on the economy amid the ongoing West Asia crisis. The revised duty structure, effective from May 13, also raises import duty on platinum to 15.4 percent, reflecting the government’s growing concerns over rising import bills and currency volatility.
The new structure includes a 10 percent basic customs duty along with a 5 percent Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports. Officials stated that the move is intended to curb “non-essential imports” and prioritise foreign exchange reserves for critical sectors such as crude oil, fertilisers, defence, industrial raw materials, and technology imports.
The decision comes amid escalating geopolitical tensions in West Asia that have disrupted global shipping routes and pushed crude oil prices above $100 per barrel. India, one of the world’s largest importers of crude oil and gold, is facing mounting pressure on its current account deficit and forex reserves.
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Since the conflict intensified, the rupee has weakened significantly against the US dollar, while foreign exchange reserves have reportedly declined sharply. Government officials described the duty hike as a “calibrated intervention” rather than a restriction on gold ownership. The policy also follows Prime Minister Narendra Modi’s recent appeal urging citizens to avoid non-essential purchases such as gold and reduce discretionary spending to support the economy during the ongoing crisis.
Industry experts expect domestic gold and jewellery prices to rise in the coming weeks as import costs increase. Analysts also warned that higher duties could revive gold smuggling activities, which had declined after the government reduced duties in 2024 to support the jewellery industry and formal trade channels.
Despite rising prices, investment demand for gold remains strong due to global uncertainty and weak equity market returns. Data from the Association of Mutual Funds in India (AMFI) showed strong inflows into gold exchange-traded funds during recent months as investors increasingly shifted toward safe-haven assets.