(INDIA) – India raised the import duty on gold and silver to 15% effective May 13, 2026, lifting the rate from 6% under government orders issued the same day.

The new levy combines a 10% basic customs duty with a 5% Agriculture Infrastructure and Development Cess. It applies to all gold and silver imports.

Government orders tied the increase to efforts to curb imports of the two metals, reduce pressure on foreign exchange reserves, narrow the trade deficit and support the rupee. The orders explicitly said the hike addresses the current account deficit.

The move came as regional tensions weighed on economic decision-making. The West Asia crisis formed part of the wider risk environment cited around the decision.

India is the world’s second-largest consumer of gold and silver, and the higher import cost is expected to hit demand. Traders and jewellers now face a sharp increase in landed costs from the first day of implementation.

No exemptions appeared in the initial orders. That leaves the duty structure broad in scope, covering all gold and silver imports under the change announced on May 13, 2026.

The revision marks a decisive shift from the previous 6% rate. Under the new structure, most of the increase comes from the restored Customs Duty burden, while the Agriculture Infrastructure and Development Cess adds another layer to the total tax incidence.

Officials framed the increase as a balance-of-payments measure rather than a sector-specific intervention. Gold and silver imports have long drawn scrutiny in India because heavy buying can widen external imbalances by increasing the import bill without directly expanding productive capacity.

Pressure on foreign exchange reserves has sharpened the policy focus on non-essential imports. The government also linked the decision to the trade deficit and the rupee, placing the duty hike within a wider response to external vulnerability.

References to Prime Minister’s forex warnings preceded the announcement. Those warnings formed part of the immediate policy context before the government issued the orders.

Industry officials warned that the higher duty could revive smuggling. That risk had receded after duty cuts in mid-2024, and the new increase raises concern that illegal channels could regain some appeal if the price gap between taxed imports and undeclared flows widens.

That concern reflects a familiar pattern in India’s bullion market. When import costs rise sharply, legal shipments become more expensive, margins tighten for compliant traders and incentives can shift toward informal supply routes.

Jewellery stocks may also face short-term pressure due to higher costs, according to ICICI Direct analysis dated May 13, 2026. Higher import taxes can feed directly into raw material prices, affecting working capital needs, retail pricing and near-term investor sentiment toward listed jewellery companies.

Any slowdown in demand would carry broader commercial effects because bullion purchases in India sit at the intersection of retail consumption, savings behavior and seasonal buying. A higher duty changes the economics for importers first, but its effect can filter through wholesalers, jewellers and consumers over time.

Silver importers face the same duty structure as gold importers under the initial orders. The absence of stated exemptions means the government chose a uniform approach rather than creating carve-outs by end use or category.

Implementation began immediately on May 13, 2026, the date on which the orders were issued. Importers bringing in consignments after that date face the revised burden of 15%, made up of 10% basic customs duty and 5% Agriculture Infrastructure and Development Cess.

The government presented the measure as part of a broader attempt to shield the external account at a time of regional strain. In bullion markets, the immediate result is straightforward: higher import costs, expected pressure on demand, and renewed concern that a steeper duty wall could push some trade back into smuggling channels.