India raises gold, silver import duty from 6% to 15% to support rupee

India sharply raised the import duty on gold and silver to 15% from 6% effective Wednesday (May 13, 2026) in a bid to cool surging demand for precious metals, ease pressure on its widening trade deficit and support a rupee that has been hovering near record lows.

Bloomberg reported that the move comes as authorities move to curb overseas purchases and ease pressure on the country’s forex reserves.

The higher duties could dampen demand in the world’s second-largest consumer of precious metals, and they may help narrow India’s trade deficit and support the rupee, one of Asia’s weakest-performing currencies.

The revised levy combines a 10% basic customs duty with a 5% Agriculture Infrastructure and Development Cess (AIDC), taking the effective import tax to 15% from 6%.

The policy shift comes at a time when the rupee has been under sustained pressure, weighed down by global uncertainty and elevated commodity purchases.

Shortly after the announcement, the currency posted a modest recovery against the dollar, trading at 95.61 on May 13 after sliding to historic lows in previous sessions.

Analysts expect the higher duties to quickly translate into higher domestic prices for gold and silver, which could temper consumer demand in the world’s second-largest gold market.

However, some market watchers warned that steeper taxes may also revive smuggling activity, a persistent challenge whenever official import costs rise sharply.

The decision also unfolds against the backdrop of escalating tensions in the Middle East, fueling safe-haven buying of gold worldwide.

Prime Minister Narendra Modi had earlier urged efforts to reduce gold imports as a way to conserve foreign exchange reserves, a message that now appears to have translated into decisive policy action.