New Delhi: India has witnessed a sharp decline in gold imports following the government’s decision to increase customs duty on the precious metal, according to a senior Finance Ministry official.
The official said gold imports have dropped by nearly 70%, with monthly imports now estimated at around 25-30 tonnes. Before the duty hike, India was importing between 75 and 100 tonnes of gold every month.
The government recently raised customs duty on gold to 15%, more than doubling the previous rate. The move has significantly affected both demand and import volumes.
Despite the decline in physical imports, the overall value of gold imports has increased due to higher international prices. In May, the value of gold imports rose 34% year-on-year to $3.41 billion.
During the first two months of FY2026-27, April and May, the value of gold imports surged 60.14% to $9.04 billion. In FY2025-26, India’s gold import bill had reached a record $71.98 billion, up 24% from the previous year, although import volumes declined 4.76% to 721.03 tonnes.
India remains the world’s second-largest consumer of gold after China, with strong demand from the jewellery sector driving large-scale imports.
Government officials believe the higher duty will help reduce pressure on foreign exchange reserves by discouraging non-essential imports. The move comes amid efforts to prioritise foreign currency spending on critical imports such as crude oil, fertilisers, industrial raw materials and capital goods.
According to the Finance Ministry, precious metals account for more than 5% of India’s total imports. Policymakers have also expressed concern that geopolitical uncertainties and volatility in global commodity markets could further increase the country’s import bill if demand for gold remains elevated.
