India has significantly increased its import duties on gold and silver, raising the tariff from 6% to 15%. This decisive action by the government comes as the nation, which is the world’s second-largest consumer of gold, confronts a depreciating rupee and a surging import bill. The move closely follows an appeal from Prime Minister Narendra Modi, who urged citizens to curb bullion purchases for a year to alleviate pressure on the national currency.

The revised tariff structure now includes a 10% basic customs duty alongside an additional 5% tax on gold and silver imports. This policy adjustment targets a substantial increase in inbound gold shipments, which saw monthly averages rise to 83 tonnes in the first two months of 2026, up from 53 tonnes in 2025. Furthermore, the value of India’s gold demand nearly doubled year-on-year during the first quarter of 2026, reaching a record $25 billion, contributing significantly to the country’s overall import expenditure.

The heightened demand for precious metals, combined with escalating global energy prices amplified by geopolitical tensions in the Middle East, has inflated India’s import costs. As a net importer of goods, the nation recorded a merchandise trade deficit exceeding $330 billion in the fiscal year ending March 2026, a marked increase from the previous year. Gold and silver collectively accounted for nearly 11% of total imports, while crude oil and petroleum products constituted 22%. While reduced gold imports are expected to help manage current account outflows, analysts suggest that persistent high energy costs will continue to exert pressure on the rupee.

In a broader effort to stabilize the economy and manage foreign exchange reserves, the government has also encouraged citizens to adopt fuel-saving practices, such as utilizing public transport, carpooling, and working from home. These comprehensive measures reflect India’s multi-pronged strategy to address its economic challenges and mitigate the impact of global price volatility.