Will the hike in customs obligation on gold, silver scale back India’s import invoice? 

With mounting stress on the present account deficit, the Centre has greater than doubled the customs obligation on gold and silver to fifteen% from 6%. It has equally hiked the import obligation on platinum to fifteen.4% from the sooner price of 6.4%.

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Authorities sources mentioned that the coverage measure goals at safeguarding macroeconomic stability, conserving overseas change, and moderating non-essential imports throughout a interval of heightened world uncertainty arising from the continued West Asia disaster. Trade gamers additionally backed the transfer and mentioned it’s a non permanent measure to tide over the present disaster.

Rajesh Rokde, Chairman, Gems and Jewelry Council mentioned commerce ought to stay calm and assured, as India’s jewelry sector has all the time demonstrated resilience and adaptableness throughout difficult instances. “GJC will proceed to work carefully with the Authorities and all stakeholders to make sure stability, client confidence, and sustained development of the business,” he mentioned in an announcement.

Elevated worldwide costs:

Whereas the upper obligation could probably decrease purchases of gold however may not have a big impression on the import invoice. Contemplate the truth that in FY26, the amount of gold imports declined by 4.76% to 721.03 tonne from 757.09 tonne. However the unit worth per kg of gold rose by 30.3% to $ 99,825.38 crore and led to an increase within the worth of gold imports by 24% final yr. Consequently, the worth of gold imports rose to $71.98 billion in FY26 from $58.01 billion in FY25.

Within the case of silver imports, each the amount and the worth elevated final fiscal. India’s silver imports jumped up 42.03% in FY26 to 7,334.96 tonne final fiscal, surging by almost 150% in worth phrases to $12.05 billion from FY25.

Officers had famous on the time that the rise is pushed by each an increase in costs, from $934.72/kg in FY25 to $1,642.93/kg in FY26 and the amount of silver imports. “If the unit worth of silver remained the identical in FY26 as in FY25, the worth of imports would have elevated from $4.83 billion in FY25 to $6.86 billion in FY26,” officers had defined.

A report by Barclays India on Wednesday additionally raised this problem and mentioned that elevated worldwide gold costs will probably outweigh potential demand-dampening, elevating the gold import invoice yr on yr.  “We don’t assume the present gold import obligation hike will considerably have an effect on the present account deficit. There may be an inverse relationship between worldwide gold costs and India’s imports: gold import demand was already weak and trending decrease in year-on-year phrases as of March 2026,” mentioned Aastha Gudwani, India Chief Economist, Barclays India. She famous that whereas the obligation hike could certainly have a dampening impact on quantity demand (based mostly on historic expertise) amid elevated worldwide gold costs, we anticipate the gold import invoice to rise additional in FY27 (+$15 billion vs FY26), offsetting the amount decline.

UAE commerce deal

In the meantime, there are additionally issues that the preferential entry by the India-UAE Complete Financial Partnership Settlement (CEPA) to gold and silver and the brand new obligation differential may result in extra imports of the valuable metals by the route.

“The widening tariff hole may encourage larger routing of worldwide bullion by Dubai, although the UAE isn’t a miner of gold or silver,” mentioned Ajay Srivastava, Founder, International Commerce Analysis Initiative (GTRI).

In a report, GTRI identified that below the CEPA, India had agreed to steadily scale back import duties on silver from 10% to zero over a ten-year interval starting in Might 2022. The concessional tariff on silver imports from the UAE at the moment stands at 7% and with common tariff now at 15%, the obligation hole has widened considerably by 8 share factors. “This creates a serious arbitrage alternative for imports routed by Dubai,” it mentioned, including that the margin is scheduled to widen additional every year till CEPA tariffs fall to zero by 2031.

Equally, gold imports from the UAE additionally get pleasure from preferential entry below the settlement. India had allowed imports of gold from Dubai at tariffs one share level under the traditional Most-Favoured-Nation (MFN) price by a Tariff Price Quota (TRQ) system, GTRI mentioned, including that the quota started at 120 tonne yearly in 2022 and is about to rise to 200 tonne by 2027 — almost one-fourth of India’s yearly gold imports. “With the brand new MFN tariff construction taking efficient duties to fifteen%, gold imported below the UAE quota would enter at 14%,” it defined.

Aside from this, there are additionally issues amongst business gamers that the upper gold and silver obligation may result in extra situations of smuggling the valuable metals into the nation.