Editor’s Note
This article outlines the government’s recent reduction of import duties on gold and silver, a significant policy shift expected to lower costs for consumers and impact domestic trade. The changes, detailed in an official CBIC notification, come as a response to high global prices and longstanding industry demands.
The government has approved the long-standing demand for a reduction in import duties on gold and silver, providing significant relief to Indian consumers and the industry amidst rising global prices. This significant change, revealed in a recent notification issued by the Central Board of Indirect Taxes and Customs (CBIC), will directly impact the trade and demand for precious metals in the country.
Under this announcement, the base import price of gold has been reduced by approximately $50 to ₹1,518 per 10 grams. Similarly, the base import price of silver has been set at ₹2,657 per kilogram, reflecting a cut of over $800. These revised prices will apply to gold and silver imported in any form under the specified tariff heading, raising hopes for stability in the Indian precious metals market.
This reduction in import duty will apply to high-purity gold bars and coins, as well as silver bullion and medallions. However, this relief will not apply to imports of jewelry, articles made of precious metals, or imports via post, courier, or baggage. The government typically revises the base import prices of precious metals every fortnight; silver’s base import price was last reset on January 27, and gold prices were last reset on January 22. This revision has been made considering changing market dynamics and global prices.
The demand for a cut in import duties on gold and silver had been long advocated by Indian industry. The Gem & Jewellery Export Promotion Council (GJEPC) had advocated in its budget proposals for reducing the total import duty on gold, silver, and platinum to as low as 4 percent.
India is the world’s second-largest consumer of gold and the largest market for silver. The country meets most of its gold demand through imports, while over 80 percent of its silver requirements are also met through supply from abroad. These figures highlight the massive demand for these precious metals in the country.
According to a study by CRISIL Ratings, retail sales volume in India is expected to grow at a rate of 5–7 percent by 2026-27, which could gain further momentum after the import duty reduction. This cut will not only make gold and silver more affordable for consumers but will also provide a competitive edge to the industry.
This import duty cut comes at a time when gold and silver prices are continuously rising globally, making this step a major positive change for Indian consumers and the jewelry industry. This is a significant initiative by the government to support the domestic market and promote the legitimate trade of precious metals.