India has raised import tariffs on gold and silver to 15% from 6%, government orders said on Wednesday, as part of efforts to curb overseas purchases of the metals and ease pressure on the country’s foreign exchange reserves.
The higher duties could dampen demand in the world’s second-largest consumer of precious metals, although they may help narrow India’s trade deficit and support the rupee, one of Asia’s worst-performing currencies.
However, industry officials warned higher import taxes could revive smuggling, which had eased after India cut tariffs in mid-2024.
The government has imposed a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports, taking the effective import tax to 15% from 6%.
“As expected, the government has raised duties to curb the current account deficit. However, this could affect demand, as gold and silver prices were already elevated,” said Surendra Mehta, national secretary at the India Bullion and Jewellers Association.
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India has raised import tariffs on gold and silver to 15% from 6%, government orders said on Wednesday, as part of efforts to curb overseas purchases of the metals and ease pressure on the country’s foreign exchange reserves.
The higher duties could dampen demand in the world’s second-largest consumer of precious metals, although they may help narrow India’s trade deficit and support the rupee, one of Asia’s worst-performing currencies.
However, industry officials warned higher import taxes could revive smuggling, which had eased after India cut tariffs in mid-2024.
The government has imposed a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports, taking the effective import tax to 15% from 6%.
“As expected, the government has raised duties to curb the current account deficit. However, this could affect demand, as gold and silver prices were already elevated,” said Surendra Mehta, national secretary at the India Bullion and Jewellers Association.