Government Hikes Customs Duty on Gold and Silver to 15% to Curb Forex Pressure

New Delhi, May 2026 : The government on Wednesday announced a significant increase in customs duties on gold and silver, raising the rate to 15 per cent from the earlier 6 per cent, as part of efforts to manage pressure on India’s foreign exchange reserves and stabilise the external account amid ongoing geopolitical tensions in West Asia.

In addition, the customs duty on platinum imports has been increased to 15.4 per cent from 6.4 per cent.

According to the revised structure, the import tax on gold and silver will now comprise a 10 per cent basic customs duty along with a 5 per cent Agriculture Infrastructure and Development Cess (AIDC), resulting in an effective duty of 15 per cent.

Officials said the move is aimed at curbing non-essential imports and reducing pressure on foreign currency outflows, as precious metals continue to be a major contributor to India’s import bill.

The decision comes at a time when global uncertainties, particularly the conflict in West Asia, have heightened volatility in energy and commodity markets, further impacting India’s external balance.

The duty hike is also expected to discourage excessive inbound shipments of precious metals and support broader macroeconomic stability.

Earlier this month, Prime Minister Narendra Modi had urged citizens to avoid non-essential purchases of gold for one year and adopt austerity measures to help conserve foreign exchange reserves amid global economic uncertainty linked to the ongoing geopolitical situation.

India remains one of the world’s largest consumers of gold, with demand primarily driven by jewellery purchases, investment needs, and seasonal festival-related buying.

Despite higher import costs, investor interest in gold remains strong. Inflows into gold exchange-traded funds (ETFs) rose sharply in April, reflecting continued demand for the yellow metal as a safe-haven asset.

According to data released by the Association of Mutual Funds in India (AMFI), gold ETF inflows increased by 34 per cent month-on-month to ₹3,040 crore in April, compared to ₹2,265 crore in March.

However, silver ETFs continued to witness sustained outflows, marking the third consecutive month of withdrawals. AMFI data showed that silver ETFs recorded an outflow of ₹126 crore in April, following outflows of ₹683 crore in March and ₹826 crore in February.

Officials indicated that the revised duty structure is part of a broader strategy to manage import dependence, strengthen the current account position, and ensure greater resilience of India’s external sector amid global economic headwinds.

(The content of this article is sourced from a news agency and has not been edited by the Mavericknews30 team.)