Govt. unlikely to raise import duties on Gold and Silver: Sources

NEW DELHI : The Government of India currently has no proposal to increase import duties on gold and silver, according to official sources, providing clarity amid recent market speculation surrounding precious metal imports and foreign exchange management.

The clarification follows Prime Minister Shri Narendra Modi’s recent appeal urging citizens to adopt prudent spending habits in view of the ongoing geopolitical tensions in West Asia and their potential impact on the Indian economy. Addressing concerns arising from rising crude oil prices and pressure on foreign exchange reserves, the Prime Minister encouraged people to reduce non-essential expenditure, including postponing gold purchases and discretionary foreign travel for the next year.

The Prime Minister emphasized the need for responsible economic participation, highlighting that conserving foreign exchange remains important at a time when India’s import costs, particularly for crude oil and precious metals, are increasing due to global market volatility and currency pressures.

Market sentiment in the jewellery sector weakened following the remarks, with several jewellery stocks witnessing significant declines during Monday’s trading session amid concerns over a possible slowdown in consumer demand.

Industry analysts noted that India’s gold import bill reached an all-time high of nearly USD 72 billion in FY26, compared to USD 58 billion in FY25. Despite a decline in import volumes to around 721 tonnes, sharply elevated international gold prices substantially increased the country’s expenditure on gold imports, thereby adding pressure on foreign exchange reserves.

Experts believe the government is encouraging a gradual shift in household savings from physical gold towards financial instruments such as bank deposits, mutual funds, and bonds, which can contribute more directly to economic growth and financial system liquidity.

Analysts also observed that if gold consumption moderates in the near term, jewellery retailers and companies linked to gold financing activities could experience softer demand conditions. However, the government’s latest clarification on import duties is expected to provide some reassurance to the industry and financial markets.