India has sharply increased import duties on gold and silver to 15% from the earlier 6% through fresh customs notifications issued by the Ministry of Finance. The new rates came into effect from May 13, 2026.
The government has imposed a 10% Basic Customs Duty along with a 5% Agriculture Infrastructure and Development Cess (AIDC) on imports of gold and silver. Earlier, the AIDC rate on these metals was only 1%.
The revised duty structure is aimed at reducing India’s rising imports of precious metals and easing pressure on the country’s foreign exchange reserves. Officials also expect the move to help narrow the trade deficit and provide support to the rupee.
PM Modi recently urged Indians to avoid buying gold jewellery for 1 year and cut petrol and diesel use to protect India’s forex reserves amid soaring crude prices. He also pushed work from home, public transport, fewer foreign trips, and lower edible oil consumption.
India is the world’s second largest consumer of precious metals, and the higher taxes are expected to reduce demand for imported gold and silver in the coming months. Industry executives, however, warned that higher duties could once again increase smuggling activity, which had declined after tariff cuts made in mid 2024.
India ETF inflows doubled to a record Rs 1.81 lakh crore in FY26. Gold ETFs alone saw Rs 68,000 crore inflows, while AUM jumped 191% to Rs 1.71 lakh crore. January recorded Rs 39,000 crore inflows before demand cooled in March.
WGC said India’s gold investment demand surged 52% YoY to 82 tons in Q1, while jewellery demand fell 19.5% to 66 tons. Total gold demand rose 10.2% to 151 tons, with investment demand share hitting 54.3% as gold prices nearly doubled since early 2025.
The government had already started tightening import rules in recent weeks by imposing a 3% Integrated Goods and Services Tax (IGST) on gold and silver imports. Following that move, several banks reportedly paused imports for more than a month.
Under Notification No. 17/2026 Customs, the government increased customs duty on entries where the earlier rate was 4.35%, replacing it with a 10% rate. The notification was issued by the Department of Revenue on May 12, 2026 and becomes effective from May 13.
Through Notification No. 15/2026 Customs, the Finance Ministry also revised multiple tariff entries related to precious metals and findings. Duties on several notified categories were doubled to 10% from the earlier 5%.
The updated notification states that gold findings and silver findings will now attract 5% duty, while platinum findings will attract 5.4% duty. Spent catalyst or ash containing precious metals meant for recovery or recycling purposes will continue to attract a concessional 4.35% rate, subject to compliance conditions and approvals from authorities.
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