Govt likely discussing import duty cut on gold and silver as high tariffs ‘fail’ to curb imports

The central government is currently discussing a reduction in import duties on gold and silver after higher rates failed to curb imports, Rajesh Rokde, Chairman of the Gems & Jewellery Council, told ET Online.

The duty isn't proving effective, said Rokde, adding that the jewellery body had warned earlier that this would fuel illegal trade, and that is exactly what is happening.

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“The government might reconsider this policy. The expectation was that imports would drop, but that didn’t happen, and imports remained largely unaffected, while the grey market expanded significantly.”

The government has likely been deliberating on this for a while, and discussions are “certainly” ongoing, though no final decision has been made yet, he stated.

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The government is simply looking for the right window to make a move, Rokde further added.

Centre sharply increased customs duties on gold and silver to 15% from 6% in May, to contain pressure on the country’s foreign exchange reserves and external account during the West Asia conflict.

India, the second-largest consumer of gold after China, roughly imports close to 700 to 900 tonnes of gold annually. According to government data, gold imports in FY26 surged 24% to a record $71.9 billion, even as import volumes fell to 721 tonnes.

Meanwhile, the yellow metal’s prices today dropped by Rs 2,045 to Rs 1,54,236 per 10 grams in futures trade amid a fall in spot demand.