1 week ago
India Reviews Gold Import Duty Cut Amid Smuggling Concerns
India is considering lowering the tax charged when gold enters the country.
The tax is currently 15%, and some traders want it reduced to 6%.
Officials raised the tax to discourage imports and protect foreign exchange reserves.
However, higher taxes can make legally imported gold more expensive.
Traders say this may encourage people to buy smuggled gold instead.
India imports about 700 to 800 tonnes of gold each year.
The government is also studying taxes on silver and platinum.
It must balance protecting money reserves with keeping metal costs manageable for businesses.
The central government is reviewing whether to reduce import duties on gold and silver, with no decision taken yet.
Bullion traders and jewellers have asked for the gold import duty to fall from 15% to 6%.
The duty was raised on May 13, 2026, to curb imports, conserve foreign exchange and limit current-account pressure.
Industry representatives say the higher tax has widened the price gap between legal and smuggled gold.
Import duties on silver and platinum are also under review, though the timing and scale of any changes are unclear.
- Who
- India’s central government, bullion traders, jewellers and industry representatives.
- What
- The government is reviewing possible reductions in import duties on gold, silver and platinum.
- Where
- India.
- When
- The gold import duty was raised on May 13, 2026; the review is ongoing.
- Why
- Officials are weighing foreign-exchange conservation and lower import pressure against concerns that high duties are encouraging smuggling and raising costs.
Case for Lower Duties
Case for Maintaining Higher Duties
Smuggling and legal imports
Case for Lower Duties
Bullion traders, jewellers and industry representatives argue that high duties widen the price gap with smuggled gold and shift demand to unofficial channels.
Case for Maintaining Higher Duties
The government raised duties to discourage gold imports and reduce incentives for foreign-exchange outflows.
Economic priorities
Case for Lower Duties
Industry representatives say lower duties could make legal imports more attractive and reduce the economic impact of elevated metal costs.
Case for Maintaining Higher Duties
Higher duties can help conserve foreign exchange reserves and limit pressure on the current account.
Impact on other industries
Case for Lower Duties
Lower duties on silver and platinum could reduce costs for sectors using these metals, including solar panels, electronics, automobiles and healthcare.
Case for Maintaining Higher Duties
The government is still weighing whether import restraint is more important than the costs higher duties impose on metal-dependent industries.
Key facts
- Current gold import duty
- 15%
- Industry proposal
- Reduce the gold import duty to 6%
- Duty increase date
- May 13, 2026
- Annual gold imports
- Around 700–800 tonnes
- April 2026 imports
- Up nearly 82% year-on-year before the duty increase
- June–July imports
- About $6.13 billion, up approximately 5.5% from $5.81 billion a year earlier
- Other metals under review
- Silver and platinum
Sources
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