India hikes gold import duty to 15% as Modi urges citizens to curb purchases
India has raised the import duty on gold and silver to 15%, up from just 6%. The move comes as Prime Minister Narendra Modi urged citizens to avoid buying gold for at least a year. The government aims to ease pressure on foreign exchange reserves and stabilise the economy amid rising global tensions and oil prices. The sudden hike in import duty caused gold prices to jump by nearly 6% to 7% on May 13, 2026. Jewellers criticised both the duty increase and the Prime Minister’s request, arguing it would hurt their business. Gold remains a major import for India, second only to crude oil, and contributes heavily to the country’s import bill.
The government has long promoted the Gold Monetisation Scheme (GMS), which lets people deposit unused physical gold in banks to earn interest while keeping it secure. However, since its launch in 2015, the scheme has gathered just 31.16 metric tonnes of gold. Many Indians still prefer holding gold directly, partly due to the availability of gold-backed loans from banks and non-banking financial companies (NBFCs). Rising crude oil prices and geopolitical instability have weakened the Indian rupee, increasing the cost of imports. By discouraging gold purchases, the government hopes to reduce the strain on foreign reserves and control the widening trade deficit.
The duty hike and the Prime Minister’s appeal signal a push to cut gold demand in the short term. With prices already climbing, consumers may face higher costs if they continue buying. The success of these measures will depend on whether Indians shift from physical gold to schemes like GMS or reduce purchases altogether.
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