India Gold Imports Drop to 30-Year Low in April Amid Tax Disruption and Demand Shift

India’s gold imports are set to witness a sharp decline in April, falling to their lowest level in nearly three decades, driven by a sudden tax-related disruption affecting bank-led imports. 

Import Disruption Due to Tax Uncertainty 

Gold imports into India have dropped to around 15 tonnes in April, significantly lower than historical averages. The decline follows a shift in tax treatment, where customs authorities began levying a 3% Integrated GST (IGST) on gold imports by banks. 

Previously, banks were exempt from this levy since the introduction of IGST in 2017. However, a delay in issuing a formal government notification authorising bullion imports has resulted in banks halting shipments altogether. 

According to news reports, no major consignments were cleared during the month, with only limited volumes entering through the India International Bullion Exchange (IIBX). 

Sharp Deviation from Historical Trends 

The drop marks a steep fall compared to recent trends. India had imported around 35 tonnes of gold in April 2025 and averaged close to 60 tonnes per month in FY26. 

The current estimate represents the weakest April performance in nearly 30 years, barring the pandemic-affected period in 2020 when demand collapsed due to nationwide lockdowns. 

Impact On Global and Domestic Markets 

The sudden decline in imports could have implications for global gold markets, as India remains one of the largest consumers of the metal.  

Lower import demand from India may exert downward pressure on international prices in the near term. 

At the domestic level, restricted supply could influence local price dynamics and availability, particularly if the disruption persists. 

Shift In Demand Dynamics 

Even as imports decline, underlying demand patterns are evolving. According to the World Gold Council (WGC), investment demand in India has overtaken jewellery consumption for the first time on record during the March quarter. 

Sachin Jain, CEO of WGC India, said: “Investment demand will become increasingly prominent in the coming quarters, with both financial and retail investors showing more interest in gold.” 

Investment demand surged 52% year-on-year to 82 tonnes, while jewellery demand declined nearly 20% to 66 tonnes. Overall gold consumption rose 10.2% to 151 tonnes during the quarter. 

Investment demand accounted for 54.3% of total consumption, a notable shift from its typical share of around 25%, indicating a structural change in buying behaviour. 

Rising Interest in Financial Gold Products 

The increase in investment demand has been supported by strong inflows into financial products such as gold ETFs. 

ETF inflows rose sharply by 186% year-on-year to a record 20 tonnes in the March quarter, reflecting growing investor preference for liquid and market-linked gold exposure amid volatile equity markets. 

Read More: India Considers 6-Month Critical Mineral Reserve to Reduce Import Reliance! 

Conclusion 

India’s gold market is witnessing a dual shift supply disruption due to tax uncertainty and a structural move towards investment-driven demand, both of which could reshape market dynamics in the near term. 

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