In a significant policy move aimed at protecting India’s external financial position amid growing global uncertainty, the Centre has revised customs duty rates on precious metals, including gold, silver, and platinum.
The revised duty structure, which came into effect on May 13 following a notification issued by the Ministry of Finance, is expected to influence the import cost of precious metals and jewellery-related products across the country.
The government has linked the decision to rising geopolitical tensions in West Asia, volatility in crude oil prices, and concerns over foreign exchange outflows. India remains one of the world’s largest consumers and importers of gold, making precious metal imports an important factor in the country’s Current Account Deficit (CAD) and forex management strategy.
Under the revised customs structure, the import duty on gold and silver has been increased sharply from 6 per cent to 15 per cent. Similarly, customs duty on platinum has been raised from 6.4 per cent to 15.4 per cent.
The government has also introduced consequential revisions in the duty structure applicable to gold and silver dore, coins, jewellery findings, and related products.
According to the Finance Ministry notification, gold and silver findings will now attract a customs duty of 5 per cent, while platinum findings will face a duty of 5.4 per cent.
The notification described jewellery findings as “small component such as hook, clasp, clamp, pin, catch, screw back used to hold the whole or a part of a piece of jewellery in place.”
These components play an important role in jewellery manufacturing and are widely used by jewellers and exporters in India’s massive gems and jewellery sector.
The government has also specified a concessional customs duty rate of 4.35 per cent for imports of spent catalysts or ash containing precious metals. However, this benefit will only be available under the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022.
To avail of the concessional rate, importers will have to comply with strict regulatory requirements.
Importers must submit an undertaking confirming the percentage of precious metals present in the imported material. They must also declare that the imports are intended for the recovery of precious metals.
The notification further mandates the submission of a certificate issued by the Ministry of Environment, Forest and Climate Change. This certificate must permit the import of spent catalyst or ash containing precious metals specifically for recovery or recycling purposes.
The move aligns with India’s increasing focus on sustainable recycling practices and resource efficiency in the metals sector.
The Centre stated that the revision in customs duty is part of a broader policy initiative to safeguard macroeconomic stability and conserve foreign exchange reserves during a period of global economic uncertainty.
According to the government, the ongoing crisis in West Asia has increased uncertainty in global trade and commodity markets. Rising geopolitical tensions have particularly affected crude oil prices and international shipping routes.
India imports a large share of its crude oil requirements, making the economy vulnerable to fluctuations in global energy prices. Higher oil import bills can increase inflationary pressure and widen the Current Account Deficit.
The government emphasized that foreign exchange resources must be prioritised for essential imports, including:
These imports are considered vital for economic growth, industrial productivity, and national security.
The Ministry noted that imports of precious metals are largely driven by consumption and investment demand. During periods of economic uncertainty, excessive imports of non-essential goods can place pressure on the country’s external sector.
The government said moderating discretionary imports could help maintain macroeconomic stability and support prudent external sector management.
India has historically remained one of the world’s biggest gold-consuming nations, with demand driven by jewellery purchases, weddings, festivals, and investment preferences. Industry experts believe that higher import duties may temporarily affect domestic gold prices and jewellery demand, while also encouraging recycling and reuse within the domestic market.
The revised customs duties are likely to increase the landed cost of imported precious metals, which may eventually translate into higher retail prices for consumers.
India’s gems and jewellery sector contributes significantly to exports and employment. While the move may help reduce import dependency, manufacturers and traders could face short-term cost pressures due to increased raw material prices.
However, analysts believe the government’s decision reflects a cautious economic strategy designed to protect the broader economy from global financial shocks.
The Centre’s decision to raise customs duty on gold, silver, platinum, and related products marks a major policy intervention aimed at strengthening India’s macroeconomic resilience amid global uncertainty. By increasing duties on discretionary imports and prioritising foreign exchange for essential sectors, the government seeks to reduce pressure on the Current Account Deficit and safeguard economic stability.
While the move may increase costs for consumers and the jewellery industry in the near term, it also highlights the government’s proactive approach toward managing external risks arising from volatile crude oil prices and geopolitical tensions. Going forward, the revised duty structure could influence import trends, domestic recycling activity, and investment patterns in precious metals across India.