India's gold imports surged 34% in May 2026 to $3.4 billion, defying the Prime Minister's call to curb purchases and a sharp increase in customs duty from 6% to 15%. For overseas jewelry buyers, this signals sustained demand in one of the world's largest gold-consuming markets, but also potential pressure on supply chains and pricing for gold-based jewelry components.
Policy and duty impact
Prime Minister Narendra Modi appealed to citizens in May 2026 to refrain from buying gold for a year, and the Ministry of Finance subsequently raised import duties on gold and silver from 6% to 15%. Despite these measures, trade data from the Ministry of Commerce shows gold imports rose 34% year-on-year in May, and 60% during April-May FY27 to $9 billion. The higher duties have not significantly slowed inbound shipments, indicating strong underlying consumer demand.
Silver imports and trade balance
In contrast, silver imports fell sharply by 85% in May and 33% during the April-May period. A Commerce Ministry official noted, "If we minus our dependence on energy goods and precious metals, we are able to grow trade in a manner where we are creating a surplus. It's just that we are not able to create enough surplus to compensate for our energy needs and precious metals." Elevated gold imports continue to pressure India's foreign exchange reserves and the rupee.
Gems and jewellery export trends
India's gems and jewellery exports declined 6.03% in dollar terms to $4.27 billion during April-May 2026, compared to $4.55 billion a year earlier. However, in rupee terms, exports grew 3.99%. The decline was driven by a 40.11% drop in plain gold jewellery exports to $635.95 million. In May alone, gems and jewellery exports rose 7% year-on-year to $2.5 billion, suggesting a partial recovery.
What buyers should watch
For overseas importers and distributors sourcing from India, the sustained gold import surge may lead to higher local gold prices and tighter availability of raw gold for jewelry manufacturing. The sharp drop in plain gold jewellery exports could signal a shift in production focus toward studded or higher-value items. Monitoring India's customs duty revisions and trade policy is essential for pricing and supply planning.
Compliance and logistics signals
The 15% import duty on gold and silver is a significant policy change that may affect the cost structure of gold jewelry components and findings sourced from India. Buyers should verify current duty rates with their Indian suppliers and assess potential impacts on landed costs. The pressure on India's foreign exchange may also influence payment terms and currency hedging strategies.
Source: Read the original report | Published: June 15, 2026