India Cuts Import Tax on Gold and Silver to 6%

India has significantly reduced its import tax on gold and silver from 15% to 6%, aiming to boost domestic value addition in the jewelry sector and combat smuggling. Announced in the 2024 budget by Finance Minister Nirmala Sitharaman, the move is expected to lower domestic prices and stimulate demand for precious metals.

This reduction includes a decrease in the basic customs duty from 10% to 6%, while maintaining a 5% Agricultural Infrastructure Development Cess, resulting in a total import duty drop from 15% to 11%. The jewelry industry has long lobbied for this change to support sector growth.

Following the announcement, the stock prices of several jewelry retailers saw significant increases, reflecting positive market reactions. However, there are concerns that the increased importation of gold could widen India's trade deficit and exert additional pressure on the rupee​.