NEW DELHI, May 13: The Centre on Wednesday increased the import duty on gold and silver to 15 per cent from 6 per cent, aiming to reduce non-essential imports and ease pressure on foreign exchange reserves amid the ongoing West Asia crisis.
The Finance Ministry issued a notification revising the social welfare surcharge (SWS) and agriculture infrastructure and development cess (AIDC), with the new rates taking effect from May 13.
The latest revision comes days after Prime Minister Narendra Modi urged citizens to avoid unnecessary expenditure on imported items, including gold, and adopt austerity measures to conserve foreign exchange reserves.
India’s gold imports climbed over 24 per cent to a record USD 71.98 billion during 2025-26, even though import volumes declined to 721.03 tonnes. The sharp rise in global bullion prices significantly pushed up the import bill.
Domestic gold prices also continued their upward trend. In Delhi markets, gold prices rose by Rs 1,500 to Rs 1,56,800 per 10 grams, while silver surged Rs 12,000 to Rs 2,77,000 per kilogram.
The government had earlier reduced customs duty on gold to 6 per cent in the 2024-25 Budget to support the gems and jewellery sector and discourage smuggling. However, mounting external pressures and a widening import burden prompted the latest reversal.
India had previously imposed a 15 per cent duty on gold imports in 2022 to contain external account pressures following the outbreak of the Russia-Ukraine conflict.
Chief Economic Advisor V Anantha Nageswaran described the ongoing West Asia tensions as a “live balance of payments stress test” with implications for inflation, the rupee, and the current account balance.
The Indian rupee touched a record low of 95.63 against the US dollar on Tuesday as energy costs and import pressures intensified.
Addressing a rally in Hyderabad earlier this week, Modi appealed to citizens to reduce fuel consumption, prefer public transport, increase EV usage, and postpone discretionary spending, including overseas travel and gold purchases.
India is also facing higher oil and fertiliser import costs due to disruptions in West Asian shipping routes, particularly around the Strait of Hormuz, a key channel for global energy supplies.