OVERVIEW
On 13 May 2026, the Indian government increased the effective import tariff on gold and silver to 15%. Earlier, it was only 6%. The new duty has two parts: a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess. This move comes after India’s gold imports reached a record $71.98 billion in 2025-26. Gold is now the second biggest import item after crude oil. The higher duty may affect prices and try to control the import bill.
GOVERNMENT RAISES IMPORT TARIFF ON GOLD AND SILVER
On 13 May 2026 , the Government of India issued new orders. These orders raised the effective import tariff on gold and silver to 15% . Before this change, the tariff was only 6%. This is a sharp increase. The new rate applies to both precious metals.
UNDERSTANDING THE NEW DUTY STRUCTURE
The 15% tariff is not a single tax. It is a combination of two different levies:
| Levy |
Rate |
| Basic Customs Duty |
10% |
| Agriculture Infrastructure and Development Cess |
5% |
| Total Effective Tariff |
15% |
Both are collected under Indian customs law. The Agriculture Infrastructure and Development Cess is an additional levy used to raise funds for farming-related projects.
GOLD IMPORTS AND TRADE DATA – WHY THE HIKE?
India loves gold. It is the world’s second-largest gold consumer. In the financial year 2025-26 , India’s gold imports rose by more than 24% . The total value reached a record $71.98 billion .
Here is how gold now ranks in India’s import list:
When gold imports go up, India spends more foreign exchange. This puts pressure on the rupee and the trade deficit. By raising the import duty, the government hopes to reduce gold demand and control the outflow of dollars.
IMPORT POLICY AND RELATED TERMS
The new 15% duty also applies to:
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Gold imported from the United Arab Emirates (UAE) under the fixed-quantity quota system
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Jewellery findings (small parts used in making jewellery)
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Precious metal-related industrial imports
These are specific categories used in customs classification and trade regulation. India has a trade agreement with the UAE that allows a certain quantity of gold to come in under quota. That gold will now also face the higher duty.
FOREIGN EXCHANGE AND SMUGGLING CONTEXT
Higher import duties on gold have two sides.
Positive side: They help manage foreign exchange. Less gold bought abroad means less money leaving India.
Negative side: Very high duties encourage gold smuggling . When legal gold becomes expensive, some people turn to illegal routes. Smuggling has been a recurring problem for Indian customs. Every time duties go up sharply, smuggling cases tend to rise. The government will have to balance both concerns.
FAQ (FREQUENTLY ASKED QUESTIONS)
Q1: What is the new effective import tariff on gold and silver in India?
A: 15% (effective from 13 May 2026).
Q2: What are the two components of this 15% tariff?
A: 10% basic customs duty and 5% Agriculture Infrastructure and Development Cess.
Q3: How much did India’s gold imports rise in financial year 2025-26?
A: By over 24%, reaching a record $71.98 billion.
Q4: Which item is the largest import of India?
A: Crude oil. Gold is now the second largest.
Q5: Does the new duty apply to gold imported from the UAE?
A: Yes, it applies to gold imported under the fixed-quantity quota system from the UAE.
EXAM-FOCUSED POINTS
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Date of tariff hike: 13 May 2026
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Old tariff: 6%
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New effective tariff: 15%
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Breakdown: Basic Customs Duty (10%) + Agriculture Infrastructure and Development Cess (5%)
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Reason for hike: Record gold imports ($71.98 billion in 2025-26, up 24%)
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Gold’s rank in imports: Second largest after crude oil
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Gold’s share in total import bill: Nearly 9%
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Also covered: Gold from UAE under quota, jewellery findings, industrial precious metal imports
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Basic Customs Duty: Central tax under Customs Act
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Agriculture Infrastructure and Development Cess: Additional levy
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Risk associated: Gold smuggling tends to rise when duties are high
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Foreign exchange link: Higher duty reduces dollar outflow