India’s sharp increase in gold import duties has done little to curb the country’s appetite for the precious metal.
Highlights
• Gold imports jumped 81.7% year-on-year to US$5.63 billion in April 2026, just before the government raised duties from 6% to 15%.
• Even after the duty hike took effect on May 13, 2026, gold imports rose 34% in May to US$3.42 billion, indicating resilient demand.
• The duty increase raised the effective tax burden on imported gold to 18.4%, yet higher tariffs have so far failed to significantly reduce India’s appetite for the precious metal.
By: Ajay Srivastava
Trade data released on June 15, 2026, show that gold imports continued to surge despite the government’s decision to raise the effective import duty from 6% to 15% on May 13, 2026, as part of efforts to reduce the trade deficit, conserve foreign-exchange reserves, and support the rupee during the energy-price shock triggered by the West Asia conflict.
The duty increase was announced through customs notifications issued late on May 12, 2026, and took effect the following day.
The move reversed the duty reduction announced in the Union Budget of July 2024, when the government had cut the effective import duty on gold from 15% to 6%.
Under the revised structure, the Basic Customs Duty (BCD) was increased from 5% to 10%, while the Agriculture Infrastructure and Development Cess (AIDC) was raised from 1% to 5%. Including the 3% Integrated Goods and Services Tax (IGST) levied on the landed value plus duties, the total effective tax burden on imported gold now stands at about 18.4%.
Gold imports rose 24.1% to US$72 billion in FY2025-26 from US$58 billion in FY2024-25.
In April 2026, before the duty hike took effect, imports surged 81.7% year-on-year to US$5.63 billion from US$3.10 billion in April 2025.
In May 2026, after the higher tariffs came into force, imports still increased 34% to US$3.42 billion from US$2.55 billion in May 2025. As a result, cumulative gold imports during April-May 2026 reached US$9.04 billion, up 60.1% from US$5.65 billion during April-May 2025.
The resilience of gold demand reflects a combination of factors: strong jewellery consumption, investor demand for safe-haven assets amid global uncertainty, and record international gold prices that inflated the value of imports. The latest figures suggest that while the May 13 duty increase moderated the pace of growth—from 81.7% in April to 34% in May—it has not materially reduced India’s demand for gold. Continued strong gold imports could keep pressure on India’s trade deficit and foreign-exchange outflows even after the sharp tariff increase.
Country-wise import data for May 2026 have not yet been released into the public domain. Once available, the data will show whether the higher duties altered sourcing patterns among major suppliers such as the UAE, Switzerland, South Africa, and other gold-exporting countries.
