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India Raises Import Duties on Gold and Silver to 15%
The Indian government has increased import duties on gold and silver to 15 percent. Officials said the move aims to reduce bullion purchases and protect foreign exchange reserves amid a weakening rupee, higher oil prices and geopolitical tensions. Industry groups stated the higher tariffs could reduce jewellery demand and lead to a rise in gold smuggling.
May 13, 3:09 AM·1m read4 sources
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Officials urged citizens to reduce gold buying in an effort to protect foreign exchange reserves. The decision was announced as the rupee weakened, oil prices rose and geopolitical tensions increased. The higher duties are intended to curb bullion imports that affect the country's current account balance.
Officials hope the measure will ease pressure on foreign currency holdings. The rupee has faced downward pressure in recent weeks amid those economic conditions. Industry groups stated the tariffs could hurt demand for jewellery. They added that the change might encourage a return to gold smuggling activities.
The full effects on the domestic market remain to be seen.
Background on the Move The adjustment in duties follows concerns over import levels of gold and silver. Such imports have contributed to foreign exchange outflows in the past. Officials have previously taken steps to manage demand for bullion when reserves faced strain.
The latest increase brings the import duty to 15 percent for both metals. This applies to shipments entering the country for commercial use. jewellery makers and retailers will face higher costs on imported raw materials.
