India does not increase import taxes on gold and silver

May 11, Reuters Quoting sources from the Indian government, the country currently has no plans to raise import taxes on precious metals. This information was released a day after Prime Minister Narendra Modi called on people to stop buying gold for a year, due to the impact of the Middle East war.

India is the world’s largest consumer of silver and the second largest consumer of gold. Previously, Mr. Modi’s call for people to stop buying gold raised speculation that the government might raise import taxes on precious metals.

Currently, gold imported into India is subject to many taxes, which can be up to about 6% in many cases.

On May 10, at an event in Hyderabad, Indian Prime Minister Narendra Modi urged people to stop buying gold, limit weddings abroad and travel to save foreign exchange.

These measures were introduced in the context of the Indian economy facing major challenges. The energy crisis caused by conflict in the Middle East is putting pressure on the country’s foreign exchange reserves and the rupee, India Today explains.

Global crude oil prices have increased about 60% since the Middle East conflict broke out in late February. The reason is that Iran blocked the Strait of Hormuz – the waterway responsible for transporting 20% ​​of global crude oil. This causes fuel costs of import-dependent countries, like India, to skyrocket.

India imports nearly 85% of the crude oil used in the country and is also one of the world’s largest gold importers. On India Today, Akshat Garg, Director of Research and Products at Choice Wealth Private, said that India’s gold imports in fiscal 2025 are about 58-60 billion USD – among the highest to date.

Increased demand for US dollars for imports will put pressure on the country’s rupee. Currently, the price of the rupee has decreased by 0.7% compared to the US dollar, falling below 95 INR per USD. Jewelry companies’ stocks also dropped 7-11%, while travel companies lost 2-5% in the May 11 session.