The Indian government has rolled out a new import duty on gold and silver. As per the latest update, the import tariffs on gold, silver, and other precious metals have seen a steep hike, rising from 6% to 15%. This increase follows Prime Minister Narendra Modi’s recent appeal to citizens to defer purchasing gold and avoid unnecessary foreign travel for at least a year. To attend weddings and enjoy holidays, Indian expatriates often purchase gold and silver items in the UAE before flying to India; however, experts believe this tariff hike is designed to moderate overseas precious metal purchases.
Why India increase Import Tariffs on Gold And Sliver
The decision to increase the import duties on gold and silver is to prevent the rising imports and protect the current account deficit amid rising oil prices and global economy uncertainty. According to the Central Board of Indirect Taxes and Customs, the revised tariff structure includes 10% basic custom duty and 5% Agriculture Infrastructure and Development Cess (AIDC). Gold is considered as the second-largest import item after crude oil in India. However, the import hike will affect the rising demands of gold and other precious metals in the country.
Will Import Duty Fee Affect Gulf Market?
The sharp increase in the import duty fee is expected to boost the Gulf market as more people will purchase precious metal as the surge in tariffs will make gold and silver more expensive in India. As the Indian expatriates are preparing for summer holidays and weddings, the growing demand for gold and silver will significantly increase footfall in the Gulf region.
Why Indians Prefer to Buy Gold From the Gulf?
UAE is considered as one of the world’s largest retail hubs for gold and silver items. During weddings and festivities, Indians living in the region prefer purchasing jewellery from the Gulf due to cheap rates. The UAE’s lower taxation system and 10 to 12 % cheaper rates encourage Indians to buy the precious metals there.
What Does Import Hike Mean for India Markets?
Industry analysts believe that total demand in India might drop by 10–15% due to the recent hike in the gold import duty. According to experts, consumers may increasingly turn to gold loans against existing jewelry to offset inflation. Gold prices in India are expected to increase to approximately 27, 000 per 10 grams, a massive increase compared to previous years. Estimates show that India imported roughly 710tonnes of gold in the 2025–26 fiscal year, and over the last decade, gold imports have nearly doubled in total value.
Will Gold Import Duty Hike Rise Smuggling Risks
Experts cautioned that the sharp tariff hike is likely to encourage the grey market, with unofficial gold flowing through regional transit hubs. As domestic prices rise above international rates, the risk of a surge in smuggling activities becomes a significant concern for law enforcement agencies.
