And There It Is: Govt Hikes Gold, Silver Duty To 15% To Curb Imports, Save Forex Reserves

In a sweeping move that will make gold significantly more expensive for millions of Indian buyers, the Centre on Wednesday raised import duty on gold and silver from 6 per cent to 15 per cent , a sharp nine percentage point jump that took effect immediately. The duty structure now comprises a 10 per cent basic customs duty and a 5 per cent Agriculture Infrastructure and Development Cess. Import duty on platinum has also been raised from 6.4 per cent to 15.4 per cent , with consequential changes extended to dore bars, coins, and findings.

The trigger is India’s deepening economic stress from the ongoing West Asia conflict . India’s forex reserves have slid from an all-time high of USD 728.49 billion in February 2026 to around USD 690.69 billion as of May 1, a fall of nearly USD 38.5 billion in roughly ten weeks. The Indian rupee hit a record low of 95.63 against the US dollar on Tuesday, while the country’s current account deficit is projected to widen sharply. With nearly 87 per cent of India’s crude oil imports dependent on routes near the Strait of Hormuz , disruptions in the region have pushed Brent crude prices from around USD 73 per barrel to USD 107 , after touching a four-year high of USD 126 in April.

The move comes days after Prime Minister Narendra Modi urged Indians to postpone gold purchases, reduce fuel consumption, use public transport, and limit foreign travel to conserve precious foreign exchange. The government now appears to have transformed that appeal into official economic policy.

The price impact on the ground is already visible. Domestic gold futures surged 7.2 per cent to ₹1,64,497 per 10 grams on Wednesday. In Hyderabad, where 10 grams of 24K gold was already priced at around ₹1,65,360 , the duty component alone has jumped from roughly ₹9,922 under the old 6 per cent structure to nearly ₹24,804 , adding an effective burden of close to ₹14,900 per 10 grams for buyers.

The All India Gems and Jewellery Council has warned that the hike could hurt the country’s ₹5-lakh-crore jewellery industry and sharply increase the risk of gold smuggling and grey-market activity. Bullion traders say the higher tariffs may once again revive illegal supply networks, especially since smuggling had reduced considerably after India cut gold duties in mid-2024. Industry observers now fear that the latest rollback could undo much of that progress.

This is not the first time India has taken such a route. Gold import duty was previously raised to 15 per cent in 2022 during the Russia-Ukraine war before being reduced to 6 per cent in the Union Budget 2024-25 to support the gems and jewellery sector. That relief has now effectively been reversed.

For now, the government’s message is unmistakable, with India facing extraordinary external pressure , conserving every possible dollar of foreign exchange has become an economic necessity.