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Just days after the Prime Minister urged people to delay buying gold, the government has sharply raised import duty on precious metals. From Wednesday, tax on gold and silver imports has jumped from 6% to 15%, making them significantly more expensive in India.
Why now: with geopolitical tensions pushing up oil and shipping costs globally, the government wants to conserve dollars for essential imports like crude oil, fertilisers, defence, and industrial goods. Since gold is seen as a non-essential import, making it costlier could help reduce dollar outflow and protect the economy during uncertain times.
And the numbers explain the concern. India’s gold imports surged over 24% to a record $71.98 billion in 2025-26, up from $58 billion last year. Gold alone now makes up over 9% of India’s nearly $775 billion import bill, while the country’s trade deficit has widened to $333.2 billion.
Stock reaction: jewellery stocks like Kalyan Jewellers, Senco Gold, Titan, and Thangamayil Jewellery fell sharply on fears that higher gold prices could hurt demand.
But gold ETFs rallied up to 15% as domestic gold prices surged after the duty hike. Gold loan companies like Manappuram Finance, Muthoot Finance, and IIFL Finance also gained because rising gold prices increase the value of gold kept as collateral.
Meanwhile, Hindustan Zinc surged as higher silver import duty is expected to benefit domestic silver producers. Since imported silver is now costlier, local silver prices could rise, helping the company earn more from the silver it already produces as a by-product of zinc and lead mining.
