New Delhi: In a significant policy shift, the Indian government has increased import duties on gold and silver to 15% from the previous 6%. The decision, announced on Wednesday, seeks to restrain inflows of precious metals and alleviate strain on the country’s foreign exchange reserves.
The tariff adjustment arrives shortly after Prime Minister Narendra Modi called on citizens to refrain from purchasing gold for a year in the national interest, amid economic challenges stemming from tensions in the Middle East. As the world’s second-largest consumer of gold and silver, India’s reduced demand for these metals is anticipated to help narrow the trade deficit and provide support to the rupee, which has been among Asia’s weaker currencies lately.
Officials have grown increasingly concerned about the surge in gold imports and their effects on external balances. Data from the Global Trade Research Initiative (GTRI) highlights a sharp rise in gold bar imports, climbing from $36.5 billion in 2022 to $58.9 billion in 2025. Imports from the UAE have formed a growing portion of this total. The think tank has backed the Prime Minister’s appeal, noting that escalating bullion purchases are weighing heavily on foreign exchange reserves and the trade balance.
GTRI further recommended that the government examine tariff concessions provided under the India-UAE free trade agreement, particularly those related to precious metals routed through Dubai, which it identifies as a key factor in the recent import surge.
Union Minister Ashwini Vaishnaw reinforced the Prime Minister’s message at the CII Annual Business Summit 2026 in New Delhi. He urged people to cut back on import-dependent spending to safeguard foreign exchange reserves, emphasizing the urgency due to ongoing instability in the Middle East and its impact on global energy supplies via the Strait of Hormuz.
This coordinated push—combining fiscal measures with public appeals—reflects broader efforts to manage India’s external sector vulnerabilities at a time of geopolitical uncertainty. The higher duties are expected to moderate domestic demand for gold and silver in both retail and investment segments, though their full impact will depend on market responses and global price trends.
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