India’s Tariff Hike on Gold and Silver Imports Concerns Its Jewelry Industry

By JCK News Desk | May 14, 2026

Stepping up its efforts to curb demand for precious metals, India has more than doubled the tariff rate on gold and silver imports. But leaders of the nation’s jewelry industry asserted the increase will do little to reduce consumption while adding cost pressures across the supply chain.

The Indian government announced on Wednesday that it is raising total import duties on gold and silver from 6% to 15%—combining a 10% basic customs duty (increased from 5%) and a 5% agriculture infrastructure and development surcharge (up from 1%).

Officials said the move is intended to limit purchases of precious metals from overseas, narrow the trade deficit, and support the rupee, “one of Asia’s worst-performing currencies,” according to a Reuters story on the tariff increase.

Industry groups quickly pushed back. The Gem & Jewellery Export Promotion Council (GJEPC) warned that higher tariffs historically have not reduced imports but instead lead to a rise in prices and encourage smuggling, the India Tribune reported.

GJEPC said the increase will particularly strain finances for small and midsize firms, which make up the bulk of its membership “and are already grappling with a liquidity crunch,” according to the article.

Reuters raised the possibility of the higher tariffs leading to an increase in illicit gold and silver flows, which the news service said declined “sharply” after tariffs were reduced in 2024. Bullion dealers have said incentives for smuggling are likely to increase under the new regime, as legal imports become more expensive and price gaps widen.

At the same time, many believe the higher tariffs are unlikely to materially dent consumer demand in the long term, as gold is deeply embedded in Indians’ cultural and financial practices. Over the past decade, gold prices have risen significantly but annual consumption has held broadly steady.

For India’s jewelry trade, the immediate impact of the duty increase is expected to be higher prices, as companies pass on the expense to consumers. The India Tribune said GJEPC is calling for talks with the government and proposing measures to retailers and manufacturers that might reduce import reliance without disrupting the industry, such as promoting lower-karat jewelry and expanding gold recycling programs.

The JCK News Desk uses AI to help research and produce the first draft of articles. This story was then reviewed by staff writer David Blomquist.

(Photo: Getty Images)