The Central Government has increased the import duty on gold and silver to 15%, a major policy move aimed at reducing pressure on India’s foreign exchange reserves and controlling rising imports of precious metals. The revised duty structure includes a 10% basic customs duty along with a 5% Agriculture Infrastructure and Development Cess (AIDC). The new rates came into effect immediately after a notification issued by the Central Board of Indirect Taxes and Customs (CBIC).

The decision comes shortly after Prime Minister Narendra Modi urged citizens to avoid unnecessary spending on imported goods, especially gold, amid growing concerns over foreign exchange outflows and global economic uncertainty. India remains one of the world’s largest importers of gold, with domestic demand heavily dependent on overseas purchases. Analysts say large-scale gold imports increase pressure on the country’s dollar reserves and widen the trade deficit, particularly at a time when crude oil prices are also rising.

Government officials believe the higher tariff will discourage excessive imports and help stabilize the rupee. The move is also being viewed as part of a broader effort to safeguard India’s external financial position amid volatile global markets and geopolitical tensions. Following the announcement, domestic gold and silver prices surged in the futures market, with traders anticipating higher costs in the retail segment. Jewellery prices are expected to rise further ahead of the upcoming festive and wedding season.

Market experts say the duty hike could influence consumer behavior, pushing some investors toward digital gold, gold ETFs, or sovereign gold bonds instead of physical purchases. However, industry bodies have warned that steep import duties may once again encourage illegal smuggling of gold into the country, an issue India has faced in previous years when tariffs were significantly high.

The government had earlier reduced gold import duties in 2024 to curb smuggling and support the jewellery sector. The latest increase signals a shift in focus toward protecting forex reserves as global economic pressures continue to mount. Economists believe the effectiveness of the move will depend on how consumers respond over the coming months and whether international gold prices remain elevated. For now, buyers across India are likely to face noticeably higher prices for gold and silver products.