India, the world’s second-largest gold consumer after China, relies heavily on imports to meet jewellery demand. Gold imports rose over 24% to a record $71.98 billion in 2025-26, although import volumes fell 4.76% to 721.03 tonnes.
Here’s a look at how the duty hike could impact jewellery prices and investments, and why expert see this as an opportunities for investors.
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India hiked import duties on gold and silver to 15% from 6% to reduce imports of precious metals amid a rising import bill due to the West Asia crisis and to support the rupee.
The higher import duties increase the cost of bringing gold into India, which could push domestic gold prices higher. This may also weaken jewellery demand as prices rise, and consumers might opt for lighter-weight jewellery.
Some experts see the duty hike as an opportunity to rebalance portfolios. Investors who are overweight on gold might consider rebalancing, while those underweight can still add exposure in a disciplined manner.
Jewellery stocks have faced selling pressure following the import duty hike due to fears of reduced demand and higher input costs. Several major jewellery stocks saw declines.
The higher duties could dampen demand and potentially increase smuggling. While aiming to reduce official imports and support the rupee, it might also lead to a focus on recycling existing gold rather than new imports.
Following the hike, the the price of gold increased by ₹1,500, or nearly 1%, to ₹1,56,800 per 10 grams in Delhi on Tuesday from Monday’s closing level of ₹1,55,300 per 10 grams. Silver prices also advanced by ₹12,000, or 4.53%, to ₹2,77,000 per kg.
On Wednesday, 24-carat gold was priced at ₹161,110/10 gm in the national capital, according to data on the Indian Bullion Association (IBA). Further, 22-carat gold was priced at ₹147,684/10 gms. Silver prices today are at ₹296,030/kg (Silver 999 Fine), as per the IBA website.
In the international market, spot gold slipped USD 42.33, or 1 per cent, to USD 4,692.64 per ounce while silver fell 3.04 per cent to USD 83.49 per ounce.
How it will impact your investments and jewellery?
Since India imports most of its gold, higher duties increase the cost of bringing the metal into the country. This could push domestic gold prices even higher, regardless of global price trends.
The move may also weaken jewellery demand as gold prices are already high. Demand for gold coins and ETFs could slow if prices keep rising.
Higher domestic premiums mean gold in India could trade at much higher prices than in global markets.
‘Good time for them to rebalance’
Vishal Dhawan, Vishal Dhawan, Founder & CEO, Plan Ahead Wealth Advisors, however, sees as an opportunity to rethink their gold investments and rebalance portfolio
“With gold prices rising sharply over the past few years, many investors who already hold gold may now be overweight on the asset class. This could be a good time for them to rebalance and streamline their portfolios.”
“At the same time, investors who remain underweight on gold can still consider adding exposure, but in a balanced and disciplined manner.”
How did the news impact jewellery stocks?
Jewellery stocks faced selling pressure for the third day running on Wednesday, with Sky Gold dropping over 11 per cent, amid fears of reduced demand due to import duty hikes.
Shares of Sky Gold And Diamonds tumbled 11.11 per cent, Kalyan Jewellers dropped 6 per cent, Senco Gold tanked 4.30 per cent, PC Jeweller edged lower by 3.65 per cent, Tribhovandas Bhimji Zaveri declined 1.74 per cent, and Titan Company dipped 1.64 per cent on the BSE.
How did gold and silver futures react to the import duty hike?
Gold prices rallied by ₹9,723 to ₹1.63 lakh per 10 grams in futures trade on Wednesday, while silver soared 7 per cent to approach the ₹3 lakh per kilogram mark after hike.
On the Multi Commodity Exchange (MCX), gold futures for the June delivery appreciated by ₹9,723, or 6.34 per cent, to ₹1,63,165 per 10 grams. Silver prices also witnessed a sharp rally, with the most-traded July contract jumping by ₹19,439, or 6.97 per cent, to ₹2,98,501 per kilogram on the MCX.
India had, in 2022, raised gold import tax to 15 per cent to check CAD (capital account deficit) amid a falling rupee due to the Russia-Ukraine war that began in February 2022.
How did jewellery market react?
“Business is now going to become difficult on the back of the Prime Minister’s austerity measures and following the import duty hike in bullion. What the industry fears is that this will give rise to grey market… smuggling is likely to grow, setting up a parallel economy in the country,” All India Gems and Jewellery Council chairman Rajesh Rokde told PTI.
Explaining the duty hike, Rokde said, now the import duty that includes Customs Duty, GST and Agricultural Cess will make gold costlier by around ₹27,000 per 10 grams from the earlier ₹13,500/10 gm.
Meanwhile, jewellery retailer Senco Gold and Diamonds MD and CEO Suvankar Sen said the import duty would remain high till the West Asia crisis remains. “So maybe for around one year it shall stay at these levels. The volumes might get impacted by 10-15 per cent, but value wise it will remain at a higher level. Consumers will buy lighter-weight jewellery,” he added.
