India has more than doubled import tariffs on gold and silver to 15 per cent from 6 per cent in a bid to support the rupee and curb rising imports of precious metals amid mounting pressure on foreign exchange reserves. The revised duty structure includes a 10 per cent basic customs duty along with a 5 per cent Agriculture Infrastructure and Development Cess (AIDC).
The move comes as the rupee remains under pressure due to elevated crude oil prices, geopolitical tensions in West Asia, and widening external-sector risks linked to disruptions in the Strait of Hormuz. India, one of the world’s largest consumers of gold and silver, imports a major share of its bullion requirements, making precious metal imports a significant contributor to the country’s trade deficit.
Industry officials expect the higher duties to dampen bullion demand and reduce pressure on forex reserves, though analysts warned that the steep hike could revive gold smuggling and increase domestic jewellery prices. Domestic gold prices surged sharply following the announcement, with jewellers anticipating softer retail demand in the near term.