Kamal Ghorui
NEW DELHI: The government on Wednesday raised import tariffs on gold and silver to 15% from 6%, according to Reuters. The move is aimed at curbing precious metal imports and easing pressure on India’s foreign exchange reserves.The sharp increase in duties comes just days after Prime Minister Narendra Modi urged Indians to avoid buying gold for a year in national interest amid rising economic pressures linked to the ongoing Middle East conflict.The higher tariffs are expected to dampen demand in the world’s second-largest consumer of precious metals. Economists say the move could help narrow India’s trade deficit and support the rupee, one of Asia’s weakest-performing currencies in recent months.The tariff hike follows growing concerns within the government over the rapid rise in gold imports and their impact on India’s foreign exchange reserves and trade balance.Earlier this week, PM Modi had appealed to citizens to defer non-essential gold purchases, including wedding-related buying, for one year. Backing the Prime Minister’s remarks, the Global Trade Research Initiative said rising bullion imports were placing severe pressure on India’s external finances.“GTRI has supported Prime Minister Narendra Modi’s appeal asking Indians to avoid buying gold for a year as rising bullion imports are hurting India’s foreign exchange reserves and trade balance,” the think tank said in a report.According to GTRI data, India’s gold bar imports rose from $36.5 billion in 2022 to $58.9 billion in 2025, with imports from the UAE accounting for an increasing share.The think tank also urged the government to review tariff concessions granted under the India-UAE free trade agreement.“At the same time, GTRI has urged the government to review its FTA policies, especially tariff concessions on precious metal offered to Dubai under the India-UAE trade deal, which it says have significantly contributed to the recent surge in gold imports,” the report added.Union minister Ashwini Vaishnaw also echoed PM Modi’s appeal during the CII Annual Business Summit 2026 in New Delhi, urging citizens to reduce import-related spending to conserve foreign exchange reserves.He said the appeal had become more urgent as instability in the Middle East continued to affect the global economy and energy flows through the Strait of Hormuz.
