India's Gold Imports Soar Amid Price Surge: What Lies Ahead?

Significant Rise in Gold and Silver Imports

New Delhi: In April, India's gold imports skyrocketed by 81.69% year-on-year, reaching USD 5.62 billion, largely due to soaring prices. However, a decline in imports is anticipated in the upcoming months following a substantial increase in customs duties on gold.

Data from the commerce ministry indicates that silver imports also surged, climbing 157.16% to USD 411 million during the same period.

Gold imports hit a record high of USD 71.98 billion in 2025-26, although the volume decreased by 4.76% to 721.03 tonnes.

Effective May 13, the government raised the import duty on precious metals from 6% to 15%.

"The increase in import duties on gold and silver will likely lead to reduced imports this year. We will need to monitor the extent of this impact," stated Commerce Secretary Rajesh Agrawal.

The effect of the higher duty on silver may be less pronounced due to its significant industrial applications.

"Nonetheless, the demand for gold and silver is expected to decline as a result of this duty hike," Agrawal added.

Regarding gold imports from the UAE, both value and volume have decreased, despite higher unit prices in 2025-26, resulting in a notable reduction in the UAE's share of India's total gold imports.

Under the India-UAE comprehensive economic partnership agreement (CEPA), a Tariff Rate Quota (TRQ) mechanism was established for gold bullion imports at a reduced duty rate (1% less than the standard customs duty).

This agreement took effect on May 1, 2022.

According to the statistics, total gold imports were 795 tonnes in 2023-24 and 757 tonnes in 2024-25, with the TRQ mechanism accounting for only about 5% (40 tonnes) and 18% (approximately 140 tonnes) of those imports, respectively.

In 2025-26, the allocated quantity under this mechanism was 8.58 tonnes, while India imported 721 tonnes in the previous fiscal year.

"I want to clarify that the TRQ concession on gold under the UAE CEPA agreement has not significantly impacted our gold imports for 2025-26," Agrawal remarked.

He noted that the total TRQ issued for gold imports under the agreement was merely USD 8 billion (around 8 tonnes), valid until June 2026.

"By March 31, only about 1 tonne of gold was actually imported. Thus, the UAE CEPA has not had a substantial effect on gold imports," Agrawal explained.

He further stated that any increase in bullion imports from the UAE in recent years has been offset by a rise in imports from Switzerland, India's primary source.

"The import of gold dore for refining in India has remained steady, with total imports around 250-300 tonnes annually from various sources, including Africa, Latin America, and the United States," the secretary noted.

Similarly, silver imports surged by approximately 150% to USD 12 billion in the last fiscal year due to rising prices, with volume increasing by 42% to 7,334.96 tonnes in 2025-26.

The increase in imports of these precious metals in April has contributed to a three-month high trade deficit of USD 28.38 billion.

Currently, gold prices are around Rs 1,56,000 per 10 grams (including all taxes) in the national capital, while silver is priced at approximately Rs 2.53 lakh per kg.

Switzerland remains the largest supplier of gold imports, holding about 40% of the market share, followed by the UAE (over 16%) and South Africa (around 10%).

Precious metals constitute over 5% of India's total imports.

Total imports from Switzerland increased by 26.73% to USD 1.47 billion in April.

India ranks as the second-largest gold consumer globally, following China, with imports primarily catering to the jewelry sector. These imports significantly affect India's current account deficit (CAD).

India's current account deficit rose to USD 13.2 billion, or 1.3% of GDP, in the December quarter, up from USD 11.3 billion a year earlier, largely due to a widening trade gap caused by reduced exports to the US, according to RBI data released on March 2.

However, the current account deficit moderated to USD 30.1 billion (1% of GDP) in April-December 2025, down from USD 36.6 billion (1.3% of GDP) during the same period the previous year.

A CAD occurs when a country's imports of goods and services exceed its exports and other receipts during a specific timeframe.

To mitigate these imports, the government has imposed restrictions on all forms of gold, silver, and platinum articles.