Mumbai, May 13 (Udaipur Kiran) — Gold and silver prices are expected to rise after the Central Government increased import duty on precious metals with immediate effect from Tuesday night.
Under the revised structure, the government has imposed a 10 percent Basic Customs Duty and a 5 percent Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports. With this change, the effective import duty has increased from 6 percent to 15 percent.
The move is aimed at reducing foreign purchases of precious metals and easing pressure on India’s foreign exchange reserves.
The revised duty structure will also apply to platinum and platinum-based products such as hooks, clasps and pins. In addition, spent catalysts and ash containing precious metals imported for recycling will attract 10 percent duty under certain conditions.
The government has amended customs rules issued in 2000, 2018, 2021 and 2025 through the latest notification.
The impact of the duty hike is expected to be visible in the jewellery sector and stock market trading. Shares of jewellery companies such as Titan Company, Kalyan Jewellers and Senco Gold had already declined between 10 and 15 percent recently amid speculation over a possible increase in customs duty. Their combined market capitalisation reportedly fell by nearly Rs 50,000 crore.
According to reported figures for the financial year 2025-26, India imported a record 71.98 billion US dollars worth of gold, exceeding Rs 6 lakh crore, which was around 24 percent higher than the previous year. India remains the world’s second-largest consumer of gold after China.
Recently, Prime Minister Narendra Modi had appealed to citizens to avoid buying gold for one year, postpone foreign travel, reduce the use of chemical fertilisers, limit consumption of edible oils and cut petrol and diesel usage. According to him, even small reductions in such expenses could help save nearly 13 billion US dollars in foreign exchange annually.
Experts remain divided on the possible savings from reduced gold consumption. Arun Singh of Dun & Bradstreet estimated that a 10 percent reduction in gold demand could save around 13 billion US dollars annually and improve India’s current account deficit by 0.3 percent of GDP.
However, D.K. Srivastava of EY India said a 10 percent fall in domestic consumption may save only around 6 billion US dollars, as not all imported gold is directly used for domestic consumption.
Economists note that while gold is considered a safe investment, excessive imports put pressure on foreign exchange reserves, increase dollar outflow, weaken the rupee against the dollar and widen the current account deficit.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
