Modi government may slash gold and silver import duties
What's the story
The Indian government is considering a reduction in the import duties on gold and silver, as per Moneycontrol. The discussion comes amid fears that the current high tax rates are pushing more imports through unofficial channels. Industry representatives, including bullion traders and jewelers, have been demanding a cut in these duties from the current rate of 15% to as low as 6%.
Duty hike
Industry representatives' argument
The current import duties on gold and silver were hiked on May 13, 2026.
The move was aimed at curbing gold imports and conserving the country's dollar reserves.
However, industry representatives have argued that a lower duty could narrow the gap between legally imported gold and smuggled gold, thereby reducing the incentive for smuggling.
Trade balance
India's gold import trends
India is one of the largest importers of gold, bringing in around 700-800 tons annually.
The country also exports gold jewelry to the UAE, Thailand, and Singapore.
Gold imports surged nearly 82% year-on-year in April 2026 before the duty hike.
This spike raised concerns over higher imports straining India's foreign exchange reserves and widening the current account deficit (CAD).
Import surge
Impact of duty hike on gold imports
The duty hike resulted in a nearly 34% rise in gold imports in May, the month when the new duty was effective for half of it.
In June and July, gold imports rose 5.5% to $6.13 billion from $5.81 billion during the same period last year.
An industry source claimed that the duty hike had led to a significant increase in smuggling as well.
Review scope
Potential changes in duties for silver and platinum
The central government is also looking into the matter in relation to silver and platinum, with discussions reportedly covering import duties across these precious metals.
However, the details, timing, and extent of any potential change remain uncertain.
Silver is used in solar energy and electronics manufacturing, while platinum finds its application in automobiles and healthcare sectors.