India Hikes Gold Import Duty to 15 Percent: Prices, Impact and What Buyers Must Know

In a major policy move that will directly impact the price of gold for every Indian buyer, the central government today (May 13, 2026) more than doubled the import duty on gold and silver, raising it sharply to 15% from the previous 6%. The notification was issued by the Finance Ministry on Tuesday and came into effect from today. This is one of the most significant interventions in India's gold market in recent years, and comes just days after Prime Minister Narendra Modi made a rare public appeal asking Indians to avoid buying gold for a full year.

Breaking: What the Government Has Done

The Finance Ministry issued two notifications on Tuesday, effective May 13, 2026, making the following changes to gold and precious metals import duties:

• Gold and silver import duty raised from 6% to 15%, comprising a 10% basic customs duty plus a 5% Agriculture Infrastructure and Development Cess (AIDC)

• Gold imported from the UAE under the concessional fixed quota system now also faces the higher duty, removing an earlier advantage that UAE gold enjoyed

• Jewellery findings such as hooks, clasps, pins, and screw backs made from gold and silver will now attract a 5% customs duty

• Platinum components will attract a 5.4% duty

• Used catalysts and ash containing precious metals imported for recovery and recycling are also covered under amended provisions

Gold Price in India Today: May 13, 2026

Following the duty hike announcement, gold prices are expected to rise further from already elevated levels. Here are today's indicative gold rates across major Indian cities (per 10 grams, excluding GST and making charges):

• 24K gold (per gram): Rs 15,398 | 22K gold (per gram): Rs 14,115 | 18K gold (per gram): Rs 11,549

• Delhi: 24K at Rs 1,54,820 per 10 grams | 22K at Rs 1,41,920 per 10 grams

• Mumbai: 24K at Rs 1,54,360 per 10 grams | 22K at Rs 1,41,500 per 10 grams

• Chennai: 24K at Rs 1,55,600 per 10 grams | 22K at Rs 1,42,630 per 10 grams

• Kolkata: 24K at Rs 1,54,430 per 10 grams | 22K at Rs 1,41,560 per 10 grams

• Hyderabad: 24K at Rs 1,54,820 per 10 grams | 22K at Rs 1,41,920 per 10 grams

Note: These are indicative retail market rates and do not include GST, TCS, making charges or the new import duty surcharge. Actual prices at jewellers will reflect the duty hike within 24 to 48 hours as existing inventory is sold through and new imported stock arrives at higher cost.

Why Has India Raised Gold Import Duty?

The government's decision is driven primarily by pressure on India's foreign exchange reserves and the ballooning current account deficit, both of which have been strained by the ongoing West Asia conflict and sustained gold import volumes. India is the world's second-largest importer of gold after China, and the metal is one of the country's largest import categories by value.

The government had already tightened the screws earlier this year by imposing a 3% Integrated Goods and Services Tax on gold and silver imports, which prompted banks to pause gold purchases for over a month, pushing April 2026 imports to a near 30-year low. Banks resumed buying after absorbing the IGST charge, but the government clearly felt that was insufficient. Wednesday's sharp hike is designed to deliver a more lasting reduction in import volumes.

PM Modi on Sunday urged Indians to avoid buying gold for one year, emphasising how seriously the government is treating the pressure on forex reserves. The duty hike two days later underlines that appeal with real policy force.

Investment Demand Was Surging Before the Hike

The duty hike arrives at a complicated moment. Gold investment demand in India had surged dramatically in the months before this announcement. Inflows into India's gold exchange-traded funds jumped 186% year-on-year in the March 2026 quarter to a record 20 metric tonnes, according to the World Gold Council. India accounted for 32% of global gold ETF demand in Q1 2026, second only to China.

Total gold investment demand in Q1 2026 rose to 82 tonnes even as jewellery volumes declined 19% year-on-year due to affordability pressures at record prices. The government's concern is clear: Indians are increasingly treating gold as a financial asset, driving up import volumes and widening the trade deficit at precisely the moment when forex reserves are under pressure.

Industry Reaction: Demand Hit, Smuggling Risk Rises

Surendra Mehta, national secretary at the India Bullion and Jewellers Association, acknowledged the government's intent while flagging the consequences: the move could significantly affect demand given that gold prices were already at record highs before this duty increase.

The concern most openly discussed in industry circles is the return of gold smuggling. A Mumbai-based bullion dealer at a private bank warned that grey markets are likely to become active again, given the profit potential the new duty differential creates. Smuggling had eased significantly after India cut gold tariffs in mid-2024. Wednesday's sharp reversal to 15% risks undoing that progress entirely, particularly given that international gold prices remain very high, creating strong profit incentives for smugglers.

What This Means for Gold Buyers in India

• Retail gold prices will rise: The full effect of the 9 percentage point duty increase will be passed on by jewellers within days as existing inventory sells through and new stock arrives at higher landed cost

• Wedding season purchases will be more expensive: Families planning gold purchases for upcoming weddings should expect meaningfully higher prices per 10 grams compared to even last week's rates

• Gold ETFs and Sovereign Gold Bonds are unaffected by the import duty directly: For investors who hold gold through paper form, the duty does not change tax treatment or redemption terms

• Hallmarked BIS-certified gold remains the safest physical purchase: As smuggled gold risks rising, only buy from trusted, certified jewellers with proper bills

• UAE gold no longer cheaper: The concessional duty rate for UAE-origin gold under the India-UAE trade agreement has been amended, removing a price advantage UAE gold previously held

Historical Context: India's On-Off Relationship with Gold Duties

India has used import duties as a lever to manage gold demand for decades. In 2013, the government raised duties sharply to 10% to address a current account crisis, which directly triggered a major surge in gold smuggling. Duties were gradually reduced to 6% by mid-2024 as smuggling came under control and international conditions eased. Today's move back to 15% is steeper than the 2013 peak and represents the highest gold import duty India has imposed in modern times.

Whether the government can avoid the smuggling cycle that has historically followed each major duty hike depends on enforcement, the trajectory of international gold prices, and how quickly domestic demand responds to higher retail prices. The next 60 to 90 days will be the critical period to watch.

Key Numbers to Remember

• New gold import duty: 15% (10% basic customs duty plus 5% AIDC)

• Previous gold import duty: 6%

• Today's 24K gold rate: Rs 15,398 per gram or approximately Rs 1,53,980 per 10 grams

• Today's 22K gold rate: Rs 14,115 per gram

• Year-on-year gold price increase in India: 81%

• India's gold ETF inflows Q1 2026: 20 metric tonnes, up 186% year-on-year

• Effective date of new duty: May 13, 2026