No Hike in Gold Import Duty for Now, Govt Says After Modi’s Appeal to Cut Purchases

As per news reports, the government currently has no plans to increase import duties on gold and silver, offering relief to the bullion and jewellery industry after Prime Minister Narendra Modi urged citizens to avoid buying gold for a year amid economic pressures linked to the Iran conflict.

The clarification comes at a time when rising gold imports and elevated crude oil prices are putting pressure on India’s trade deficit, rupee, and foreign exchange reserves.

Why Gold Imports Are Under the Spotlight

India remains the world’s second-largest consumer of gold and the largest consumer of silver, relying heavily on imports to meet domestic demand.

According to reports, India’s gold imports rose 24.1% year-on-year to $72 billion in FY26, while silver imports surged nearly 150% to $12.1 billion. Together, the two precious metals accounted for 10.8% of the country’s total imports.

The sharp increase has sparked concerns because higher imports can widen the current account deficit, especially when crude oil prices remain elevated.

However, as per government officials cited in reports, there is currently no proposal to raise import duties despite speculation in the market following the Prime Minister’s comments.

Jewellery Stocks Tumble on Market Concerns

The uncertainty still triggered a sharp reaction in jewellery stocks on Monday.

Shares of Titan Company Limited fell 6.73%, while Kalyan Jewellers India Limited dropped 9.27%. Senco Gold Limited also declined 8.52% amid fears that higher duties or import restrictions could eventually be introduced.

Industry executives warned that any sharp increase in duties could hurt demand and encourage smuggling. Before import duties were reduced to 6%, nearly 100–120 tonnes of gold reportedly entered India annually through grey-market channels.

At the same time, trade bodies are urging the government to strengthen Gold Monetisation Schemes to mobilise idle household gold and reduce import dependence.

Read more: ₹76,000 Crores and Counting: What Exactly Does IREDA Do with All That Money?

Conclusion

While reports suggest the government is not considering a duty hike immediately, concerns over India’s rising gold import bill continue to remain in focus. For investors, the episode highlights how policy commentary, global tensions, and commodity prices can quickly influence sentiment in jewellery and bullion-related stocks.

With gold demand still strong and economic risks rising, the sector is expected to remain under close market watch in the coming months.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

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