Gold and Silver Purchases Become More Expensive

Import Duty Increased to 15 Percent

On May 13, the Government of India increased the import duty on gold and silver from 6% to 15%. This decision came just days after Prime Minister Narendra Modi appealed to citizens to avoid purchasing gold for one year.

The Prime Minister made the appeal due to economic pressure caused by the Middle East crisis and its impact on India's foreign exchange reserves.

Reason Behind the Duty Increase

The central government has imposed:

• 10% Basic Customs Duty
• 5% Agriculture Infrastructure and Development Cess

The main objectives behind the move are:

• Reducing precious metal imports
• Controlling the trade deficit
• Supporting the Indian Rupee

Pressure on the Indian Rupee

The Indian Rupee had fallen to its record low of ₹95.75 against the US Dollar, increasing pressure on the government to stabilize the currency and reduce import-related outflows.

Contrary to Earlier Reports

Earlier reports had suggested that there was no immediate plan to increase import duties on gold and silver following Prime Minister Modi’s appeal. However, the government has now taken a different decision by officially raising the import duty rates.