Gold and Silver set to get more expensive as Modi government raises import duty by 10 percent, massive turmoil expected in bullion market

Experts are of the opinion that controlling nonessential imports such as gold had become necessary to improve the trade balance and protect foreign exchange reserves.

Written by: Victor Dasgupta Edited by: Victor Dasgupta

Published: May 13, 2026, 6:49 AM IST

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https://www.india.com/business/gold-silver-price-modi-government-sarafa-market-bullion-market-mcx-import-duty-excise-kolkata-delhi-chennai-hyderabad-noida-gurgaon-8412674/ Copy

Gold and Silver prices likely to surge (File)

New Delhi: In a significant development, the Nirmala Sitharaman-led Finance Ministry has issued a new notification increasing the basic customs duty on gold and silver to 10 percent. With this, buying gold and silver will become even more expensive for common people. In addition, a 5 percent Agriculture Infrastructure and Development Cess (AIDC) will also be levied on them. The effective import duty on gold and silver has also spiked by 6 percent to 15 percent after this order.

Also read: ‘Use EV vehicles, work from home top priority’: Why PM Modi addressed the nation twice in 24 hours on energy savings

It is important to note that this increase is not limited only to raw gold and silver, but duties on jewellery-making components (findings) and platinum have also been revised. The overall production cost for the jewellery industry will rise following this decision.

Ministry of Finance updates customs duty rates for precious metals & findings vide Notification 16/2026-Customs, effective today (May 13).

Gold & Silver findings to attract 5% duty, Platinum findings at 5.4%. Precious metal spent catalyst set at 4.35%, subject to the fulfilment… pic.twitter.com/atSGTXjDTQ

— ANI (@ANI) May 13, 2026

Here’s why the decision was taken:

• The Modi government’s decision is aimed at controlling India’s rising gold imports and widening trade deficit.
• In the financial year 2025–26, India’s gold imports reached a record level of 71.98 billion dollars
• This spike was 24 percent higher than the previous year.
• Although there was a slight decline in the volume of imports, high prices in the international market put significant pressure on the country’s foreign exchange reserves.
• During this period, the country’s total trade deficit reached 333.2 billion dollars.
• Experts are of the opinion that controlling nonessential imports such as gold had become necessary to improve the trade balance and protect foreign exchange reserves.

Also read: ‘Remain calm and avoid any panic’: Modi government minister makes big statement after PM Modi’s Sunday address

Impact on the industry

The jewellery industry is expected to be the most affected by this decision. It is important to note that the jewellery market provides employment to a large number of people in the country. Jewellers say that the rising costs from raw materials to finished ornaments could impact demand. Demand for gold usually increases during festivals and the wedding season, but higher prices may discourage buyers.