NEW DELHI: The government on Wednesday increased import tariffs on gold and silver to 15% from the earlier 6%. The move is intended to reduce precious metal imports and ease pressure on India’s foreign exchange reserves.
The sharp hike comes only days after Prime Minister Narendra Modi urged citizens to avoid buying gold for a year in the national interest amid rising economic pressures linked to the ongoing Middle East conflict.
Concerns Over Trade Deficit and Forex Reserves
The higher duties are expected to dampen demand in India, the world’s second-largest consumer of precious metals. Economists believe the measure could help narrow the country’s trade deficit and strengthen the rupee, which has been among Asia’s weaker-performing currencies in recent months.
The tariff increase follows growing concern within the government over the rapid rise in gold imports and their impact on India’s foreign exchange reserves and overall trade balance.
PM Modi Appeals to Citizens to Reduce Gold Purchases
Earlier this week, PM Modi appealed to citizens to postpone non-essential gold purchases, including wedding-related buying, for one year.
Backing the Prime Minister’s remarks, the Global Trade Research Initiative said rising bullion imports were placing severe pressure on India’s external finances.
The think tank stated that increasing gold imports were hurting India’s foreign exchange reserves and widening the trade imbalance.
Gold Imports Surge Since 2022
According to GTRI data, India’s gold bar imports increased from $36.5 billion in 2022 to $58.9 billion in 2025. Imports from the UAE accounted for an increasingly larger share during this period.
Calls to Review India-UAE Trade Concessions
GTRI also urged the government to reconsider tariff concessions on precious metals granted under the India-UAE free trade agreement.
The organisation argued that concessions offered to Dubai under the trade pact had significantly contributed to the recent surge in gold imports.
Government Warns of Global Economic Risks
Union minister Ashwini Vaishnaw echoed the Prime Minister’s appeal during the CII Annual Business Summit 2026 in New Delhi, urging citizens to reduce import-related spending in order to conserve foreign exchange reserves.
He said the appeal had become more urgent due to instability in the Middle East, which continues to affect the global economy and energy flows through the Strait of Hormuz.
