BackECONOMY
India doubles import duty on gold & silver to 18.4% effective May 13, 2026
The government issued two notifications late on May 12 to raise import duties on gold and silver, making the total effective tax about 18.4% from 9.2%. The changes take effect on May 13, 2026, and have drawn skepticism from industry players who warn of potential smuggling and negative effects on employment in the jewelry sector.
Why It Matters
The move alters the cost of imports for precious metals, with potential implications for inflation, CAD, and employment in the jewelry supply chain. It also raises questions about policy clarity and effectiveness in achieving its stated fiscal aims.
Timeline
3 Events
Industry and analyst reaction to the duty hike
May 13, 2026
Industry players, economists, and investment advisers described the move as retrograde and blunt, warning it may encourage smuggling and negatively impact employment in jewelry and related sectors. The Gem & Jewellery Export Promotion Council highlighted risks to MSME manufacturers, while the think-tank Global Trade Research Initiative criticized the drafting and clarity of the notifications.
Duty hike becomes effective
May 13, 2026
From May 13, 2026, the import duties on gold and silver are in effect with basic customs duty raised to 10% and AIDC raised to 5%, resulting in an overall effective tax rate of about 18.4% when IGST is included.
Notifications issued to raise import duties on gold and silver
May 12, 2026
The government issued two notifications late on May 12 to raise import duties on gold and silver: the basic customs duty is increased to 10% and the Agriculture Infrastructure and Development Cess (AIDC) is raised to 5%, with the IGST component remaining part of the calculation, producing an effective import tax of about 18.4%. The changes are to be applied from May 13, 2026.