India's gold imports fell 27% to $19.27 billion in the first half of the financial year, and by 81% in September alone, after the government raised the import duty to 15% in May. The drop helped narrow the trade deficit.
At a glance
- Gold imports in September fell 81.27% from a year earlier, to $1.8 billion.
- Silver imports dropped 25.17% to $2.4 billion in April-September.
- India's merchandise trade deficit narrowed to $30.21 billion in September from $33 billion a year earlier.
Background
India mines very little gold, so almost all the gold its jewellers and investors buy is imported. That makes gold one of the country's biggest import bills, and it weighs on the trade deficit and the rupee. On May 13, the government raised the customs duty on gold and silver to 15% from 6% to slow these purchases.
What happened
India imported $19.27 billion of gold between April and September 2026, down 27.32% from $26.51 billion a year earlier, Commerce Ministry data showed on October 15. The fall was steepest in September. Gold imports that month dropped 81.27% to $1.8 billion, the second straight monthly decline, PTI reported.
Silver followed the same path. September silver imports fell 49.11% to $665.08 million, and imports for April-September fell 25.17% to $2.4 billion.
Why imports fell
The duty rise made every imported kilogram more expensive. A 15% duty instead of 6% raises the landed cost of gold, so jewellers and traders buy less from abroad. Prime Minister Narendra Modi also urged people to defer gold purchases during the West Asia crisis.
Buyers have found other sources. Many households are trading in old jewellery for new pieces, which lets jewellers recycle gold instead of importing it. BusinessLine noted that it is still unclear how much of the fall comes from the duty alone.
What it means for India
Lower gold purchases are helping the trade balance. India's merchandise exports rose 23.04% to $44.40 billion in September, while total imports rose to $74.61 billion. The trade deficit narrowed to $30.21 billion from $33 billion a year earlier.
A smaller gold bill reduces pressure on the rupee and foreign exchange reserves, the government's stated reason for the duty rise. Switzerland remains the largest supplier, with about 40% of India's gold imports, followed by the UAE at more than 16% and South Africa at about 10%.
Our read
Outlook: bearish. Weaker imports from the world's second-largest gold consumer show softer physical demand. Global prices depend more on the Fed, the dollar and central bank buying.
What to watch
- October import data, which will show whether festive-season buying lifts imports again.
- Any change to the 15% customs duty on gold and silver.
- The rupee's exchange rate, which also affects the landed cost of gold.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-10-16.
Detailed analysis
Timeline
- 2026-05-13: India raises the customs duty on gold and silver to 15% from 6%.
- 2026-10-15: Commerce Ministry data show gold imports fell 27% in April-September and 81% in September.
Demand Drivers
Old-gold exchange is replacing some imported metal as households swap jewellery instead of buying new gold.
Government Policies
The duty rise to 15% on May 13 is the main policy lever cutting India's gold imports.
Currency Impact
A smaller gold import bill eases pressure on the rupee and India's foreign exchange reserves.
What could lift prices
- Festive and wedding season demand could lift imports again in the coming months.
- A cut in the import duty would quickly make imported gold cheaper.
What could weigh on prices
- An 81% fall in September imports shows how sharply Indian physical demand for imported gold has weakened.
- The government's call to defer gold purchases may keep buying subdued.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | High | Lower gold imports have narrowed the trade deficit and eased pressure on the rupee. |
| Switzerland | Medium | It supplies about 40% of India's gold, so its refiners sell less to India. |
| United Arab Emirates | Low | The UAE supplies more than 16% of India's gold imports. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Jewellery | Negative | Higher duties raise the cost of imported gold for Indian jewellers. |
Who gains, who loses
- India's trade balance: A smaller gold bill helped narrow the September trade deficit to $30.21 billion.
- Gold exporters to India: Refiners in Switzerland, the UAE and South Africa are selling far less gold to Indian buyers.
Other ways this could play out
- If festive demand is strong, October imports could recover even with the 15% duty.
- If the government cuts the duty, imports could rebound and widen the trade deficit again.
Price risks
- Strong central bank buying could lift global prices regardless of weaker Indian imports.
- A weaker rupee could raise domestic prices even as imports fall.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
India
Switzerland
South Africa