The Indian government has significantly increased import tariffs on Gold and Silver, raising them from 6% to 15% in a move aimed at reducing the demand for these precious metals and alleviating pressure on the nation’s foreign exchange reserves, as reported by Reuters.
This adjustment in import duties includes a 10% basic customs duty alongside a 5% Agriculture Infrastructure and Development Cess (AIDC) on Gold and Silver imports. The Department of Revenue, operating under the Customs Act, issued this notification, marking a substantial hike to the effective import tax rate.
Additionally, items derived from Gold and Silver—such as small components used in jewellery fabrication—including hooks, clasps, clamps, pins, and screw backs, will now incur a 5% customs duty.
Market observers were already alert to this impending change. Prime Minister Narendra Modi recently urged citizens during an event in Hyderabad to postpone their Gold purchases for a year, limit fuel consumption, and curtail foreign travel, all in a bid to conserve India’s foreign exchange reserves.
As a result of these new tariffs, several Indian stocks, particularly in the jewellery sector, have experienced notable declines. Companies like Titan, Kalyan Jewellers, Senco Gold, Sky Gold, and P N Gadgil have seen their stock values drop by as much as 15% this week alone.
