India raised import tariffs on gold and silver to 15%, effective 13 May 2026, reversing duty cuts made in 2024. The goal is to curb bullion imports, reduce the trade deficit and support the Indian Rupee amid external pressures.
The basic customs duty on gold and silver imports rose to 10% from 5%. A further 5% agriculture infrastructure and development cess was added, taking the total to 15%.
Tariff And Duty Changes
Customs duties were also revised for precious metal findings and recyclable waste. Gold and silver findings are now 5%, platinum is 5.4%, and spent catalysts are 4.35%.
The changes follow surging bullion imports and a weakening rupee. The article was produced using an artificial intelligence tool and reviewed by an editor.
This new 15% import tariff on gold and silver is a clear move to strengthen the Indian Rupee. It’s a direct response to the trade deficit, which reportedly widened to $21.5 billion last month, and the rupee’s recent slide towards 84.50 against the dollar. We see this policy as an attempt to curb dollar demand for bullion imports.
Trading Implications And Strategy
For the coming weeks, we should consider shorting USD/INR futures, as the government’s action is designed to put downward pressure on the pair. Buying put options on the USD/INR is another direct way to position for a stronger rupee. This is based on the expectation that reduced gold imports will immediately ease pressure on India’s current account.
The policy change has already caused a stir in the options market, with one-month implied volatility for USD/INR jumping to 6.8% this morning. While this makes options more expensive, it creates opportunities for volatility plays like selling strangles if we anticipate the rupee will stabilize after an initial reaction. We must act quickly before the market fully prices in this intervention.
However, we need to be cautious as the long-term effect is not guaranteed. Looking back at a similar duty hike in 2022 from our perspective in 2025, the rupee saw only a temporary lift before global factors, like US interest rate policy, reasserted control. The success of this move heavily depends on a stable external economic environment.
This tariff hike will likely dampen official gold demand, but it could also fuel a rise in illegal smuggling to bypass the high duties. This has been a recurring pattern whenever the tax difference between India and neighboring markets becomes significant. Consequently, the actual reduction in the trade deficit might be less than the official import data suggests.
