Indians Will Pay More for Gold After Government Hikes Duty to 15%

India has raised import duty on gold and silver to 15% from 6%. This sharply increases the cost of bullion purchases for the world’s second-largest gold consumer.

The new rate combines a 10% basic customs duty with a 5% Agriculture Infrastructure and Development Cess.

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Buying Gold in India Just Got More Expensive

The Finance Ministry’s notification reverses a July 2024 decision that cut the effective duty from 15% to 6%. BeInCrypto reported that Prime Minister Narendra Modi had appealed to citizens just days earlier to pause gold purchases for a year.

Indian jewelry stocks absorbed the warning earlier in the week. Titan, Senco Gold, and Kalyan Jewellers each posted losses on Monday after the prime minister’s televised remarks.

India ranks as the world’s second-biggest gold consumer after China. Domestic mining remains relatively low, leaving the country reliant on imports.

Monthly imports averaged 83 tonnes across January and February 2026. That compares with 2025’s monthly average of 53 tonnes, according to a World Gold Council report published last month.

“Total gold demand in Q1 rose 10% y/y to 151t, although volumes remained 9% below their long-term average. In value terms, demand nearly doubled, surging 99% y/y to a record INR2,275bn (US$25bn). Strong investment demand of 82t, led by bars, coins and ETFs, more than offset weaker jewellery volumes (66t), while industrial demand held steady (2t),” the report read.

The country’s trade deficit hit $330 billion in the fiscal year 2026, with gold and silver accounting for nearly 11% of total imports.

Modi Pairs Public Appeal With Tariff Action

Modi’s appeal comes as the Iran war continues to weigh on India’s economy. Along with cutting back on gold, he urged Indians to curb fuel consumption and bring back remote work arrangements.

India’s currency has taken a heavy hit amid the geopolitical tensions. According to Reuters, the rupee is now the worst-performing major Asian currency this year, having shed close to 5% of its value since February 28.

It slid to a fresh all-time low of 95.7375 against the dollar yesterday, breaking past the earlier trough of 95.4325.

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