Gold Import Duty Cut Likely? Centre May Reduce 15% Levy as Imports Stay High, Grey Market Expands

The Centre is considering a cut in import duties on gold and silver after the higher levy failed to significantly reduce imports and was instead followed by an expansion in the grey market, Gems and Jewellery Council Chairman Rajesh Rokde told ET Online.

Gold Import Duty Cut Likely? Centre Reviews 15% Levy as Grey Market Expands

The government had raised the import duty on gold and silver to 15% from 6% in May. The move was aimed at reducing bullion imports and easing pressure on the country's external account.

However, the jewellery industry says the higher duty did not have the desired impact. According to Rokde, gold imports remained largely unaffected, while the higher cost of legal supplies made unofficial channels more attractive.

Gold Import Duty Cut: Why Is Government Considering It?

India is one of the world's largest gold consumers and depends heavily on imports because domestic production is limited. Demand is supported by jewellery purchases, weddings, festivals and investment.

Government data cited in the industry discussion showed that India's gold import bill rose 24% to a record $71.9 billion in FY26, even though import volumes fell to 721 tons.

This highlights the impact of high international gold prices on the country's import bill. For the government, the challenge is to control imports without encouraging more gold trade through unofficial channels.

Gold Import Duty Cut: Will Gold Prices Fall for Buyers? Check Impact on Jewellers, Consumers

A reduction in import duty could lower the landed cost of gold and narrow the price gap between legal and grey-market supplies. However, it may not result in an equal fall in retail gold prices.

Domestic gold rates also depend on international prices, the rupee-dollar exchange rate, taxes and local market conditions. Consumers would therefore see the full benefit only if these factors remain supportive. For jewellers, lower duties could make formal gold supplies more competitive and help reduce the advantage enjoyed by unofficial sellers.

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