India increased the import duty on gold and silver to 15%. This change took effect on May 14, 2026. The previous duty rate was 6%. This policy aims to support the depreciating rupee by curbing non-essential imports. High energy costs from the Middle East conflict have widened the national trade deficit.
Prime Minister Narendra Modi recently urged citizens to reduce gold purchases to conserve foreign exchange reserves. Domestic gold futures on the Multi Commodity Exchange surged by more than 6% following the news. India is the world's second-largest consumer of the precious metal. The tariff hike creates a significant headwind for global physical gold demand. Higher costs are expected to reduce demand from both consumers and jewelers. This shift may weigh on international spot prices alongside Federal Reserve policy and geopolitical tensions.