Gold Prices to Rise? India May Hike Import Duty on Gold and Silver

Gold and silver prices hit record highs in early 2026. Starting from January, gold prices in India are expected to reach record highs. Import duties on gold and silver may be increased to control speculation in the domestic gold market, and therefore, the prices of gold in India may rise significantly. 

Import duties on silver import duty and gold may be included in the Union Budget 2026-27 to control issues in the domestic market. Traders in the bullion market India will be affected by this, along with regular consumers and significant economic players such as jewellers. 

The gold price forecast will be updated as speculation on the price of gold continues to rise. Speculation on gold prices and their impact on the domestic market will be discussed in detail in this article.

Current Situation of Gold and Silver Prices in India

Gold and silver prices remain high at the end of January 2026 because of new global and local factors. Prices for international gold are very high and stay around 5,500 to 5,600 dollars per ounce. Geopolitical tensions, fears of inflation, and central banks are buying a lot of gold. In India, local prices are higher because of premiums; local bullion dealers are charging 121 dollars per ounce more than the official price, which is a record for the last 10 years.

 

 

These premiums have increased because of possible new policies. Customers are panicking and buying gold in large quantities because they think prices will go up due to a new duty increase. Investment demand has also increased silver prices because of its use in electronics and solar panels. Along with high global prices, India also has high local prices. Thus, the high gold silver prices.

Gold prices have always been increasing, but the recent economic uncertainty has caused prices to increase exponentially. The chart displays the long-term increasing prices of gold.

Gold Import Duty India and Silver Import Duty

India imports almost all its gold and over 80% of its silver, making customs duties end Gold Import Duty India and Silver Import Duty. Currently, these duties are 6% and include 5% Basic Customs Duty and 1% Agriculture Infrastructure and Development Cess. This 6% duty had been applied after the previous 15% duty that was in place until July of 2024 to reduce smuggling and improve market conditions.

The customs duties regulate the price of imported bullion and are often shifted down to consumers. For example, when the duties increase, the price of the bullion is shifted to the end consumers, further increasing their price. The bullion market in India becomes denser. Duty changes often have mixed results. For example, throughout 2012 and 2013, the duties shifted up to 10% in an effort to stabilise the Indian rupee and demand.

Previous Changes in Duties and Influence

The last five Union Budgets have had significant changes in the duties applied to each of the budgets.

- 2021: The duties were decreased to 7.5% from 12.5% with an added 2.5% cess.

- 2022: No changes were made.

- 2023: The duty on silver was increased to 10%.

- 2024: The duties on both metals were decreased to 6%.

- 2025: No changes made.

These new measures demonstrate the government's tightrope walk of managing the import of gold while trying to protect the gold the country can spend to make jewellery, a significant provider of employment. Duties were lower in the first half of 2024, but imports shot up in 2025. Concerns were reignited, and so were imports: gold was valued at $58.9 billion (1.6% increase) and silver $9.2 billion (44% increase).

Why India Is Considering Increasing Import Duties on Gold and Silver

Increasing import duty on these two commodities is simply a reflection of the pressure these imports create on the economy. 2025 alone recorded inflows of $10 billion (over 10% of India’s foreign reserve), which piled pressure on the trade deficit and drove the rupee to a historic low. Therefore, in a high inflation global environment, gold and silver imports, aimed mainly at investment and jewellery, are perceived by policymakers to be irrelevant.

A forecast increase of 4 to 6% implies a complete reversal in trade policies made in 2024. As the trade deficit expands, the need to protect the value of the rupee by controlling demand is the most economically feasible option. Previous occurrences established that demand is inelastic; thus, a shift to black markets and cryptos to invest in gold.

 

 

Why Higher Gold Import Duties Could Raise Gold Prices

An increased gold import duty in India or silver import duty means imported gold will cost more. Gold importers will add the taxes to the cost, so gold will be more expensive on the wholesale and retail levels. This means that even US gold prices will go up due to the US’s expectation of the import duty increases.

If the duty hike on imported gold and silver happens, that will mean India’s gold and silver prices will go up even more, and even though international gold prices may stay the same. 

This means that the demand for gold and silver jewellery will go down, but there will be more investment (positive) in gold ETFs (in 2025, gold ETFs had a 283% increase). As history has shown, the chance of gold and silver being illegally imported (smuggling) will increase. In the end, more of the same will happen.

Effects on the Bullion Market in India

India has a large bullion market, which includes jewellery, which is still the largest market, and also includes gold bars and coins, and digital gold. A duty increase can:

- Increase the local prices and premiums.

- Cause a demand shift to paper gold (like ETFs) instead of physical gold.

- Increase the pressure on already expensive jewellery.

- Increase affordability during festival and wedding seasons.

India has a large cultural connection to gold, so the gold demand will remain, despite the costs.

What Does The Future Hold For Gold Prices Forecasted for 2026? 

The gold price forecast for 2026 remains somewhat optimistic and somewhat complex. There is an increase in global uncertainty and central banks holding gold, which lend support, if in limited scope, for higher prices. In India, a duty increase could push domestic prices higher by roughly 5 - 10 % minimum. The World Gold Council says to expect a drop in demand, and that would help limit price increases, which follows 2025 expected declines.

If (or when) a duty increase occurs or in cases when the jewellery sector gets its wishes and duties decrease, domestic prices may slightly decrease. With global prices increasing, however, a significant price decrease is unlikely. Gold has always been a hedge and will continue to be for the foreseeable future until the global economic outlook changes significantly.

 

 

Conclusion

The expected changes in gold import duty in India and silver import duty also make it more challenging to navigate the bullion market in India. A hike would increase gold price rise projections domestically, and no increase would provide temporary pricing relief. It is very likely that the Budget will be somewhat more aggressive this cycle, so investors would be wise to pay attention to shifts in frameworks and encourage a greater distribution of capital to holding-sized models that fundamentally support longer-term thinking over short-term, reactive, speculative models.

The Indian market remains captivated by the promise gold and silver provide. Expect swift changes in the gold and silver prices as the global landscape evolves.

DISCLAIMER: This blog is NOT any buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always consult your eligible financial advisor for investment-related decisions.