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Higher Gold Import Duty Sparks Concern Among Traders and Consumers
Anytime News Network
Pooja Srivastava
The central government’s decision to increase the effective import duty on gold and silver to 15 percent has triggered concern across the jewellery and bullion industry. The revised structure includes a 10 percent basic customs duty along with a 5 percent Agriculture Infrastructure and Development Cess (AIDC). The new rates will come into effect from midnight of May 13, 2026.
Jewellery traders believe the sharp increase in import duty is likely to make gold significantly more expensive in the domestic market, putting additional pressure on middle-class consumers and small businesses. Gold prices had already crossed the ₹1 lakh per 10 grams mark in 2025, and the new tax structure is expected to further weaken consumer demand.
Lucknow Chowk Sarrafa Association Senior Vice President Adish Kumar Jain said the government may be aiming to control excessive imports and protect foreign exchange reserves, but the move could also create serious negative consequences for the domestic jewellery market. He warned that higher duties may once again encourage gold smuggling activities, which had reportedly declined after earlier tax reductions.
Industry observers noted that the government had reduced import duties to 6 percent in the 2024-25 budget to support the gems and jewellery sector. The sudden reversal in policy is being viewed by many traders as a sign of uncertainty, potentially affecting business planning and investor confidence within the industry.
Experts also fear that higher taxation and soaring prices may reduce jewellery purchases during upcoming wedding and festive seasons. Small jewellers, artisans and bullion traders are expected to face the biggest challenges if demand weakens further.
The policy change has created uncertainty in the bullion market, with traders closely watching its impact on imports, retail prices and consumer sentiment in the coming months.
