India Hikes Gold,Silver import duty to 15% — What It Means for Buyers Trade Deficit and the Rupee

The government raised import duties on gold and other precious metals on Wednesday, May 13, days after Prime Minister Narendra Modi urged citizens to avoid buying gold for a year.

Under Customs Notification No. 16/2026, the Ministry of Finance announced that gold and silver findings will now attract a 5 percent duty, while platinum findings will be taxed at 5.4 percent. The effective import duty on gold and silver has jumped from 6 percent to 15 percent, with the revised rates taking effect immediately.

The stated aim is to curb overseas purchases of precious metals and ease pressure on India’s foreign exchange reserves.

What it means for buyers and the economy

Higher duties are likely to dampen demand in India, the world’s second-largest consumer of gold. On the other hand, the move could help narrow India’s trade deficit and provide some support to a rupee that has been under pressure for several months.

The stakes are significant. India produces no gold of its own and meets nearly all domestic demand through imports, which are paid for in US dollars. In 2025-26, gold imports accounted for 9 to 10 percent of India’s total import bill, costing the exchequer a record $71.98 billion.

Also Read:Gold and Silver Prices Surge in India

India’s forex reserves have come under strain due to Middle East tensions and rising crude oil prices. The International Monetary Fund has also projected a wider current account deficit if the conflict continues. The duty hike is being read as a pre-emptive step to protect those reserves before the pressure deepens.