Gold Import Duty Hiked: After PM Modi’s Appeal, Government Raises Import Tax on Gold and Silver Imports

Gold Import Duty Increased: This major decision regarding the import of gold and silver was taken just days after Prime Minister Narendra Modi appealed to citizens to refrain from purchasing gold for one year in an effort to conserve foreign exchange reserves.

Gold Import Duty: Prime Minister Narendra Modi recently appealed to the citizens of the country to abstain from buying gold for a period of one year. Just days later, the Government of India raised the effective import duty on gold and silver from 6 percent to 15 percent, effective at midnight on May 13, 2026.

The government has increased the Basic Customs Duty (BCD) to 10 percent, upon which a 5 percent Agriculture Infrastructure and Development Cess (AIDC) is applicable. This brings the total tax burden to 15 percent. Similarly, a new duty of 10 percent will also be applicable to platinum and jewelry findings (such as pins and hooks).

Why Was the Import Duty Increased?

The objective behind increasing the import duty on gold and other precious metals is to curb their importation, reduce the trade deficit, and strengthen the Indian Rupee while simultaneously alleviating pressure on the country's foreign exchange reserves.

Import duty on gold and other precious metals has been increased, and the revised rates will come into effect from midnight tonight pic.twitter.com/7iWfOFp6j6

— IANS (@ians_india) May 12, 2026

In the fiscal year 2026, gold imports reached a record high of $72 billion, a surge that has impacted the country's Current Account Deficit (CAD). This stringent measure was adopted to maintain economic stability amidst the ongoing conflict between Iran and the United States.

Impact on the Market and Investors

The hike in import duty is expected to trigger an immediate surge of up to ₹2,000 per 10 grams in the prices of gold and silver. Following PM Modi's appeal—and now this latest development—the share prices of companies such as Titan, Kalyan Jewellers, and Senco Gold are likely to witness a significant impact.

Risk of Smuggling May Rise

Raising the import duty from 6 percent to 15 percent could serve as a major incentive for smugglers, as profit margins were lower when the duty was lower. Now, with the combined impact of the 15 percent duty and the 3 percent GST, the total tax differential amounts to 18 percent. Experts suggest that the price gap per kilogram of gold between international markets, such as Dubai, and Indian markets could now exceed ₹11 lakh, a margin substantial enough to reactivate illicit networks.