Govt hikes customs duty on gold, silver and platinum imports amid global uncertainty

The government has sharply increased customs duties on gold, silver and platinum imports, citing the need to conserve foreign exchange reserves and protect the economy from rising global uncertainties linked to the ongoing West Asia crisis.

The revised duty structure, notified by the Ministry of Finance, came into effect on May 13 and also covers jewellery findings, dore, coins and certain precious metal-related imports.

Officials said the move is aimed at moderating non-essential imports at a time when geopolitical tensions are causing volatility in global crude oil prices and disrupting international shipping routes.

Import duty on gold and silver raised to 15%

Under the revised structure, import duty on gold and silver has been increased from 6 per cent to 15 per cent. Platinum imports will now attract a customs duty of 15.4 per cent, compared to the earlier 6.4 per cent.

The duty hike reverses the reduction announced in the Union Budget 2024-25, when customs duties on precious metals were lowered amid relatively stable macroeconomic conditions.

According to Finance Ministry sources, India’s foreign exchange resources must be prioritised for essential imports such as crude oil, fertilisers, industrial raw materials, defence equipment, critical technologies and capital goods.

Officials noted that precious metals, while culturally important and widely used for investment purposes, involve significant foreign exchange outflows with comparatively limited industrial linkages.

“This is a carefully calibrated and proportionate intervention designed to encourage moderation, not a ban,” Finance Ministry sources said, adding that consumer choice and market flexibility would remain unaffected.

Revised duty rates for jewellery findings notified

The Finance Ministry has also updated customs duty rates for jewellery findings and related components.

Under the new notification, gold and silver findings will attract a customs duty of 5 per cent, while platinum findings will face a duty rate of 5.4 per cent.

The government defined findings as small jewellery components such as hooks, clasps, clamps, pins, catches and screw backs used to hold a complete piece or part of jewellery in place.

“For this entry, gold, silver or platinum findings mean a small component such as a hook, clasp, clamp, pin, catch, or screw back used to hold the whole or a part of a piece of jewellery in place,” the official notification stated.

The changes are aimed at ensuring greater clarity in trade classification and taxation of jewellery-related imports.

Lower duty for precious metal spent catalysts

The notification also introduced a concessional customs duty rate of 4.35 per cent for spent catalysts or ash containing precious metals, subject to strict compliance conditions.

To avail of the concessional rate, importers will have to comply with the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022.

The Finance Ministry said importers must provide an undertaking to customs authorities regarding the percentage of precious metals contained in the imported material and confirm that the goods are meant for the recovery or recycling of precious metals.

“Provided further that the importer at the time and place of clearance gives an undertaking to the Deputy Commissioner of Customs or Assistant Commissioner of Customs regarding the percentage of precious metals contained in spent catalyst or ash containing precious metal being imported,” the notification said.

Officials added that the concessional duty is aimed at supporting recovery and recycling activities while ensuring strict monitoring of imports.

Environmental clearance made mandatory

The government has also made environmental clearances mandatory for the import of spent catalysts and ash containing precious metals. Importers will now have to submit certificates issued by the Ministry of Environment, Forest and Climate Change, permitting the import of such materials for recovery or recycling purposes.

The Finance Ministry said the requirement has been introduced to ensure that imported materials are handled through legitimate recycling channels and comply with environmental regulations.

The notification stated that importers must “produce a certificate from the Ministry of Environment, Forest and Climate Change before the Deputy Commissioner of Customs or Assistant Commissioner of Customs permitting import of spent catalyst or ash containing precious metal for recovery or recycling purposes.”

Officials said the measure is intended to strengthen regulatory oversight and prevent misuse of concessional import provisions.

Move aimed at protecting economy from external shocks

Finance Ministry sources said the decision reflects the government’s broader strategy to reduce vulnerability to external economic shocks at a time of rising geopolitical tensions and uncertainty in energy markets.

India, being one of the world’s largest crude oil importers, faces the risk of a widening current account deficit and inflationary pressures if foreign exchange outflows increase sharply.

Officials indicated that customs duty rates on precious metals may be reviewed again, depending on future macroeconomic conditions and easing of global pressures.

The government also linked the move to broader calls for economic discipline and responsible consumption, including efforts to reduce avoidable foreign expenditure and conserve resources.

Finance Ministry sources described the duty revision as a preventive and forward-looking step aimed at maintaining economic stability without resorting to stricter import restrictions in the future.