India's gold imports surged 34% year-on-year to $3.41 billion in May 2026, while silver imports plunged over 86% to $75.57 million, according to data from the Economic Times. The divergence follows the government's import duty hike on precious metals from 6% to 15% effective May 13, 2026.
Import Duty Hike on Precious Metals
The Government of India raised the import duty on precious metals from 6% to 15% effective May 13, 2026. The policy change appears to have had a limited impact on gold imports in May, but silver imports saw a dramatic decline. Silver shipments fell to $75.57 million in May from $566.22 million in May 2025, a drop of over 86%.
Gold Import Sources and Trends
Switzerland remains the largest source of gold imports, accounting for about 40% of India's total gold shipments, followed by the UAE (over 16%) and South Africa (about 10%). However, in May 2026, total gold imports from Switzerland dipped 57.73% compared to the same month last year. Over the first two months of fiscal 2026-27, Swiss gold imports fell 20.34%.
In the domestic market, gold prices hover near Rs 1,60,000 per 10 grams (inclusive of all taxes) in the national capital, while silver is priced at around Rs 2.60 lakh per kg.
Silver Import Collapse
Silver imports collapsed to $75.57 million in May 2026 from $566.22 million in May 2025, a decline of 86.65%. The sharp drop is likely influenced by the duty hike, which made imports more expensive.
Trade Deficit and Current Account Implications
The rise in gold imports contributed to India's trade deficit of $28.21 billion in May 2026. The imports have implications for India's current account deficit (CAD), as India is the world's second-biggest gold consumer after China, with imports primarily meeting jewellery industry demand.
According to Reserve Bank data, India reported a current account surplus of $7.1 billion (0.7% of GDP) in the January-March quarter of 2025-26, compared to a surplus of $13.7 billion (1.4% of GDP) in the fourth quarter of 2024-25. For the full fiscal year 2025-26, the current account deficit stood at $25.2 billion (0.6% of GDP), slightly higher than $22.9 billion (0.6% of GDP) in 2024-25.
| Period | Current Account Balance | % of GDP |
|---|---|---|
| Q4 2024-25 | Surplus $13.7 bn | 1.4% |
| Q1 2025-26 (Jan-Mar) | Surplus $7.1 bn | 0.7% |
| FY 2025-26 | Deficit $25.2 bn | 0.6% |
| FY 2024-25 | Deficit $22.9 bn | 0.6% |
For importers and customs brokers, the duty hike on precious metals effective May 13 remains a key factor affecting costs and import volumes. The shift in sourcing from Switzerland, with a 57.73% drop in May, and the overall increase in gold imports despite higher duties, suggest changing trade patterns that require close monitoring.
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