Gold Import Duty: Prime Minister Narendra Modi had recently appealed to the citizens of the country not to buy gold for a year. A few days later, the Government of India increased the effective import duty on gold and silver from 6 percent to 15 percent, which has come into effect from midnight of May 13, 2026.

The government has increased the Basic Customs Duty (BCD) to 10 percent, on which 5 percent Agriculture Infrastructure and Development Cess (AIDC) is applicable. Due to this the total tax increased to 15 percent. Similarly, a new duty of 10 percent will also be applicable on platinum and jewelery findings (pins, hooks).

Import duty on gold and other precious metals has been increased, and the revised rates will come into effect from midnight tonight. pic.twitter.com/7iWfOFp6j6

— IANS (@ians_india) May 12, 2026

Why was the import duty increased?

The purpose of increasing the import duty on gold and other expensive metals is to control their import, reduce the trade deficit and strengthen the Indian rupee by reducing the pressure on foreign exchange reserves.

Gold import reached a record $72 billion in the financial year 2026, which has affected the country’s current account deficit (CAD). This strict step was taken to maintain economic stability amid the Iran-American war.

Impact on markets and investors

Due to increase in import duty, an immediate jump of up to Rs 2000 per 10 grams can be seen in the prices of gold and silver. After PM Modi’s appeal and now this news, there can be a big impact on the shares of companies like Titan, Kalyan Jewelers and Senco Gold.

Danger of smuggling may increase

Increasing the import duty from 6% to 15% can become a big incentive for smugglers because when the duty was low, the margin was low. Now including 15% duty and 3% GST, the total difference in tax is 18%. Experts say that now there can be a difference of more than Rs 11 lakh per kg of gold between international markets like Dubai and Indian markets, which is enough to activate illegal networks.

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