India's Monthly Gold Imports Plunge After Duty Raised to 15%

Overview

• The government raised the effective import duty on gold and silver to 15% from 6%, a change that took effect on May 13 and sharply raised the landed cost of imports.
• Customs stopped notifying banks as designated importers from April 1, leaving only a small number of authorised agencies, including MMTC, to bring gold into the country.
• Reported monthly physical inflows have fallen from roughly 75–100 tonnes to about 25–30 tonnes, while import values stayed high because global gold prices pushed May imports to about USD 3.41 billion and FY26 imports to a record USD 71.98 billion.
• Officials link the rule changes to Prime Minister Narendra Modi’s call for austerity on gold purchases and to a policy goal of freeing foreign exchange for crude oil, fertilisers and other essential imports, and traders report higher recycling of old jewellery as a result.
• Watch for second‑order effects on the trade deficit, domestic jewellery makers and retail prices if strong consumer demand and high international gold prices continue to support imports despite the tighter regime.