India Raises Gold and Silver Import Duties Amid West Asia Crisis: What You Need to Know

In response to the escalating crisis in West Asia, the Indian government has raised import duties on gold and silver from 6% to 15%. This move aims to curb the rising import bill, which surged to an all-time high of USD 71.98 billion in 2025-26. Prime Minister Modi has called for reduced gold purchases and other austerity measures to conserve foreign exchange. As gold prices continue to rise, the implications for the economy and the jewellery industry are significant. This article delves into the details of the duty hike and its potential impact on the market.

By Narendra Chaudhary May 13, 2026, 10:14 IST

Government Takes Action on Precious Metal Imports

In a significant move, the Indian government has increased import duties on gold and silver from 6% to 15% as part of efforts to manage the rising import costs linked to the ongoing crisis in West Asia. This decision was announced on Wednesday.

Following Prime Minister Narendra Modi's recent appeal for reduced gold purchases and other austerity measures aimed at conserving foreign exchange, the Finance Ministry issued a notification to implement this hike in duties, which will take effect from May 13.

As a result of this adjustment, the total customs duty on gold will now stand at 15%.

India's gold imports reached a staggering USD 71.98 billion in the fiscal year 2025-26, marking a 24% increase. However, in terms of volume, imports saw a decline of 4.76%, totaling 721.03 tonnes.

The price of gold has escalated from USD 76,617.48 per kilogram in FY25 to USD 99,825.38 per kilogram in FY26.

In the capital city, gold prices rose by Rs 1,500, nearly 1%, reaching Rs 1,56,800 per 10 grams on Tuesday, up from Rs 1,55,300 the previous day. Silver also saw a significant increase, climbing by Rs 12,000, or 4.53%, to Rs 2,77,000 per kilogram.

On the international front, spot gold prices fell by USD 42.33, or 1%, settling at USD 4,692.64 per ounce, while silver dropped by 3.04% to USD 83.49 per ounce.

In the budget for 2024-25, the government had previously reduced the customs duty on gold to 6% to support the domestic gems and jewellery sector, combat illegal smuggling, and lower local prices.

In 2022, the import tax on gold was raised to 15% to address the capital account deficit amid a depreciating rupee, a situation exacerbated by the Russia-Ukraine conflict that began in February 2022.

As the second-largest consumer of gold globally, following China, India's imports are primarily driven by the jewellery sector.

Chief Economic Advisor V Anantha Nageswaran remarked that the current crisis in West Asia represents a 'live balance of payments stress test,' which directly impacts inflation, the current account, and exchange rates.

The balance of payments (BoP) reflects the difference between the inflow and outflow of foreign exchange in a specific timeframe.

The Indian rupee recently hit a record low of 95.63 against the US dollar.

During a rally in Hyderabad organized by the Telangana BJP, Modi urged citizens to use fuel wisely, delay gold purchases, and limit foreign travel to conserve foreign exchange amidst the ongoing crisis.

He suggested measures such as reducing petrol and diesel usage, utilizing metro services, carpooling, increasing electric vehicle (EV) adoption, using railways for parcel transport, and promoting remote work to save foreign exchange.

India is currently facing a high import bill for oil and fertilizers due to the ongoing US-Iran conflict, which has persisted for over ten weeks, effectively closing the Strait of Hormuz. Notably, India relies on imports for 60% of its LPG needs, with 90% of that supply passing through the now-closed Strait.