India’s gold imports have fallen sharply following the government’s decision to increase customs duty on the precious metal, with monthly imports dropping by more than 65%, according to a senior government official. The decline comes amid weaker domestic demand and restrictions on import channels after banks lost their status as designated gold importers.
Before the duty revision, India imported between 75 and 100 metric tonnes (MT) of gold every month. Since the increase, monthly imports have fallen to around 25–30 MT. Officials attribute the slowdown to both higher import costs and reduced consumer demand, as rising gold prices have discouraged purchases in the retail market.
The government raised customs duty on gold and silver from 6% to 15% on May 13, 2026, citing the need to conserve foreign exchange reserves during a period of global uncertainty linked to the West Asia crisis. The higher duty has significantly increased the landed cost of gold, pushing domestic prices to record highs.
Compounding the impact is the absence of banks from the list of nominated agencies allowed to import gold. Traditionally, banks have been among the largest bullion importers, supplying jewellers and traders across India. However, customs authorities have not renewed their authorization since April 1, 2026.
At present, only three nominated agencies, including MMTC, are permitted to import gold. Industry participants believe the limited number of authorized importers has further tightened supply channels and contributed to lower import volumes.
Officials noted that the government currently tracks only the quantity of gold on which customs duty has been paid, making it difficult to assess broader market dynamics. Nevertheless, weaker jewellery demand is also playing a significant role in the decline.
India remains one of the world’s largest gold consumers and importers. During the 2025-26 financial year, the country imported 721.05 MT of gold worth nearly $72 billion. The bullion industry is now closely watching whether banks will regain their designated importer status in the coming months.
