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India Raises Gold Import Duty to 15% to Protect Forex Reserves
13 May
Summary
- India has increased the import duty on gold and silver to 15%.
- This move aims to reduce imports and conserve foreign exchange reserves.
- Prime Minister urged citizens to postpone gold purchases for one year.
In a significant move to protect foreign exchange reserves, India's Finance Ministry has increased the import duty on gold and silver to an effective 15%. This new duty, comprising a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC), was announced late on Wednesday, May 13, 2026. The decision directly addresses concerns over rising gold imports.
Earlier on Sunday, Prime Minister Narendra Modi had publicly urged citizens to avoid purchasing gold for a year. This appeal underscores the nation's reliance on imports for its gold consumption and the pressure on its foreign exchange reserves. The government has been actively seeking to curb these imports, having previously implemented a 3% integrated goods and services tax (IGST) which had temporarily halted imports in April, leading to a nearly 30-year low. With the increased duty, imports are anticipated to decline further.
The surge in gold demand, particularly for investment purposes, has been noted amidst recent price rallies and negative returns in the equity market over the past year. Gold exchange-traded funds (ETFs) in India saw a substantial increase in inflows during the March quarter, highlighting investor interest.
