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Rising Gold Prices and Import Surge Increase Pressure on Current Account Deficit
Gold-Silver: India's gold imports increased by 82% to $5.62 billion in April, and silver imports by 157% to $4.11 billion. The government has increased customs duty on precious metals from 6% to 15%, with the aim of reducing imports and controlling the trade deficit.
In April, India witnessed an increase in the purchase of gold and silver. Gold purchases were up by 81.69% to $5.62 billion, while those of silver increased by 157.16% to $4.11 million. The surge was attributed to rising costs of precious metals. Starting May 13, the government increased customs duties on gold and silver from 6% to 15%.
The Commerce Ministry’s data revealed that the value of gold imports in the 2025-26 fiscal year increased by 24% to a record $71.98 billion, despite the quantity decreasing by 4.76% to 721.03 tons. Imports of silver surged by almost 150%, reaching $12 billion, despite increasing by 42% in volume to 7,334.96 tons.
Commerce Secretary Rajesh Agarwal stated that the increased import duty is likely to reduce imports this year. In the case of silver, the impact of the duty hike may be relatively minimal due to its industrial use. He believes that consumption-based demand will definitely decline. He also clarified that the Tariff Rate Quota (TRQ) under the Comprehensive Economic Partnership Agreement (CEPA) with the UAE has not had a significant impact on gold imports.
