Duty Shock: Gold, Silver Imports Become Costlier

The central government has sharply increased import duties on gold, silver, and platinum, making precious metals significantly more expensive in India. The basic customs duty on gold has been raised from 5% to 10%, while the Agriculture Infrastructure and Development Cess has increased from 1% to 5%. As a result, the total import duty on gold has gone up from 6% to 15%, effective immediately after the Finance Ministry’s notification issued on Tuesday. The government’s main objective behind this move is to reduce pressure on India’s foreign exchange reserves and control the trade deficit. India imports most of its gold requirements from abroad, leading to heavy dollar outflow. With crude oil prices remaining high and the rupee under pressure, the government wants to discourage excessive gold purchases. Officials believe higher prices may reduce imports, helping conserve dollars for essential needs like oil imports, debt payments, and supporting the Indian currency during global economic uncertainty.