India has increased import tariffs on gold and silver in an effort to stabilise the weakening rupee and protect foreign currency reserves under pressure from rising global energy costs linked to the conflict in the Middle East.
According to official orders issued on Tuesday, the government has more than doubled import duties on gold and silver to around 15 percent from the previous 6 percent. The move comes as gold imports continue to place pressure on India’s dollar reserves, given that purchases are typically financed in foreign currency.
Prime Minister Narendra Modi had earlier urged citizens to reduce gold consumption for a year amid concerns over the rupee’s prolonged decline against the US dollar.
The Indian currency has come under additional strain due to rising global oil prices triggered by disruptions in the Middle East, including tensions affecting the Strait of Hormuz, a key global shipping route for crude oil.
India, the world’s third-largest oil importer, has seen its import bill rise sharply as crude prices increase, further weakening its balance of payments position and adding pressure on foreign exchange reserves.
The government has also called for reduced domestic fuel consumption, with Modi urging citizens to limit the use of petrol and diesel in response to supply disruptions.
Gold remains one of India’s largest imports after crude oil and plays a significant cultural and economic role, particularly during weddings and festivals.