Gold import duty hiked to 15%: Key changes May 2026

What the government changed on May 13

India has increased customs duty on imports of key precious metals, lifting the levy on gold and silver to 15% from 6% and on platinum to 15.4% from 6.4%. The revised rates took effect from May 13, according to notifications and reports citing Finance Ministry sources. The changes also apply to gold and silver dore, coins, findings, and other related items. Officials linked the move to the need to conserve foreign exchange and protect macroeconomic stability amid rising global uncertainty tied to the West Asia crisis. The government has described the step as a price-based disincentive rather than an import curtailment through quotas. It also comes close to public messaging around austerity, with reports noting the Prime Minister’s appeal to citizens to reduce gold purchases for a year.

The stated rationale: foreign exchange, CAD, and inflation risk

Finance Ministry sources said the duty hike is aimed at moderating “non-essential” or “avoidable” import demand at a time when geopolitical tensions are adding stress to global commodity markets. Reports cited volatility in crude oil prices and disruptions in international shipping routes as key concerns. As a major oil importer, India faces the risk of a wider current account deficit (CAD) if import bills and foreign exchange outflows rise sharply. Officials also flagged inflationary pressure as a related risk if the external account comes under strain. Some reports also linked the move to pressure on the rupee against the US dollar during the period of heightened uncertainty. The policy intent, as described by officials, is to reduce vulnerability to external shocks before pressures intensify further.

“Not prohibitory”: how officials framed the decision

Finance Ministry sources emphasised the measure is not designed to block imports. Officials described it as “carefully calibrated and proportionate” and “neither prohibitory nor anti-consumer in nature,” according to multiple reports. The messaging is that consumer choice and market flexibility are being preserved, even as the government uses higher duties to discourage avoidable demand. Officials also argued that using duties is preferable to harsher tools such as quantitative import restrictions or tighter import controls. In this framing, the duty hike serves as a preventive measure to manage external-sector risks.

What is covered: dore, coins, findings, and more

Alongside bullion, the duty changes extend to several product categories linked to precious metals. Notifications and reports said coverage includes gold and silver dore, coins, findings, and related items. In addition to the headline duty rates on gold, silver, and platinum, the government also revised rates for findings and certain industrial inputs. Under the revised structure reported, gold and silver findings attract a 5% customs duty, while platinum findings face a 5.4% duty. Imports of spent catalysts or ash containing precious metals were reported to attract a concessional 4.35% duty, subject to compliance conditions and recycling-related clearances.

Reversal of Union Budget 2024-25 cut

The hike reverses a cut announced in the Union Budget 2024-25. At that time, customs duty on gold and silver was reduced from 15% to 6%, and on platinum from 15.4% to 6.4%, with officials pointing to more comfortable external-sector conditions. The latest increase takes the rates back to the earlier levels, reflecting what officials described as fresh external risks. Government sources also noted that customs duties on precious metals have historically been adjusted in line with macroeconomic conditions. This time, the adjustment is being positioned as forward-looking, designed to curb vulnerability before external pressures become more acute.

Breakdown of the new duty structure

Some reports provided additional detail on how the higher burden is being achieved for gold and silver. The government imposed a 10% basic customs duty alongside a 5% agriculture infrastructure and development levy, taking the overall customs duty on gold to 15%. Reports also mentioned changes to components such as the social welfare surcharge (SWS) and the agriculture infrastructure and development cess (AIDC), effective May 13. While the reporting focuses on the end rates for bullion, the broader message is that the duty structure has been adjusted across multiple line items in the tariff schedule.

Immediate market reaction: MCX prices jump

The duty hike was followed by sharp moves in domestic futures prices, as cited in the reports. Gold and silver prices reportedly shot up by about 6% on MCX on Wednesday after the decision. One report said MCX gold futures were trading at Rs 1,62,648 per 10 grams at the open, up 6%. Another data point cited gold futures rising by Rs 9,723 to about Rs 1.63 lakh per 10 grams. Silver futures were reported near the Rs 3 lakh per kilogram mark, with one report citing Rs 2,95,805 per kg. These moves reflect the immediate repricing of imported precious metals after higher customs duties.

Why precious metals matter for the external account

Gold and silver imports are often discussed in India’s policy debates because they can swell the import bill without directly feeding productive capacity in the short term. Officials explicitly linked the policy to moderating “avoidable import demand” and easing pressure on the external account. The broader concern cited in reports is that external shocks tied to West Asia could raise India’s overall import costs, especially via crude oil. In such a scenario, containing other large, discretionary import categories can be a tool to conserve foreign exchange. The government’s approach, as described, is to use duties to influence demand rather than restricting supply through administrative limits.

Key numbers at a glance

Timeline: from Budget cut to May 2026 hike

What to watch next

For consumers, higher duties can translate quickly into higher domestic prices, as reflected in the cited MCX moves. For markets, the key issue is whether higher duties meaningfully reduce import volumes and help contain pressure on the external account, which officials have said is the objective. The government has positioned the step as a preventive intervention, chosen over quantitative restrictions. The revised rates are already in effect from May 13, and further clarity will depend on subsequent trade data and any additional tariff-line notifications covering related products.