India's Gold Imports Rise 34% In May Despite 15% Customs Duty

India's gold imports climbed 34% year-on-year to $3.41 billion in May 2026, even as the government raised customs duty on precious metals and Prime Minister Narendra Modi urged people to avoid buying gold for a year.

The sharp rise in imports also contributed to widening the country's trade deficit, which stood at $28.21 billion during the month.

The government increased import duty on gold and silver from 6% to 15% with effect from 13 May. However, the latest commerce ministry data suggests that higher taxes have done little to cool demand for the yellow metal, whose prices remain near record levels.

In the national capital, gold was trading at around ₹1.60 lakh per 10 grams, inclusive of taxes, while silver was priced at nearly ₹2.60 lakh per kilogram.

Why Are Gold Imports Still Rising?

Data released by the Ministry of Commerce showed that gold imports touched $9.04 billion during April-May of FY27, marking a 60.14% increase from the same period last year.

In contrast, silver imports dropped sharply. They fell 86.65% to $75.57 million in May from $566.22 million a year earlier. During the first two months of the fiscal year, silver imports declined about 33% to $486.58 million.

A Commerce Ministry official said that if energy imports and precious metals were excluded, India's trade position would have been in surplus. According to the official, the country has struggled to generate enough export gains to offset its dependence on these categories.

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Jewellery Exports Lose Shine

India, the world's second-largest gold consumer after China, relies heavily on imports to meet demand from the jewellery industry. Switzerland remained the biggest source of gold imports, accounting for around 40% of shipments, followed by the UAE and South Africa.

Gems and jewellery exports stood at $4.27 billion in April-May 2026, lower than $4.55 billion recorded in the same period last year. A sharp drop in plain gold jewellery shipments weighed on overall exports. Exports in this category fell 40.11% year-on-year to $635.95 million. Despite the weak start to the fiscal year, outbound shipments picked up in May, with exports rising 7% from a year ago to $2.5 billion.

Sources:

The Economic Times

The New Indian Express