India’s gold imports are coming under pressure after the government raised the effective import duty on gold and silver to 15% from 6% in May, as part of efforts to curb precious-metal inflows and reduce pressure on foreign exchange resources.
Prime Minister Narendra Modi has also urged consumers to postpone non-essential gold purchases, with the government seeking to contain the country’s large import bill. India imported a record $71.98 billion worth of gold in FY26, up more than 24% from the previous year, although import volumes declined by nearly 5%.
The impact of the measures has become more visible in recent months. According to Metals Focus data cited by the Economic Times, gold imports fell nearly 4% in May, 20% in June, 23.7% in July and almost 30% in August year-on-year. However, the decline cannot be attributed solely to Modi’s appeal, as higher import duties and elevated international gold prices have also influenced demand.
The government’s strategy is aimed at reducing foreign-exchange outflows and improving the trade balance. India imports most of its gold requirements, making the metal a significant contributor to the country’s import bill. The government is also encouraging households to put part of their estimated 31,000 tonnes of privately held gold into more productive use.
Industry expectations suggest that gold imports could decline further in September, although the upcoming festive and wedding season could test the effectiveness of the higher duty and the government’s appeal for restrained purchases.