By Kimberley Kao
India has hiked tariffs on gold and silver imports, days after Prime Minister Narendra Modi warned that the Middle East crisis was pressuring the country's foreign-exchange reserves.
A finance ministry notification published Wednesday showed that levies on several precious metals and related products were raised in a move the government said was in the public's interest.
According to a person familiar with the matter, India has more than doubled the import duty on gold and silver to 15% from 6%, and that on platinum to 15.4% from 6.4%.
The measure aims to conserve foreign resources and prioritize essential imports like crude oil, fertilizers and critical technologies during a time of significant volatility in global energy markets and international shipping routes, the person said.
As a major crude oil importer, India is exposed to higher oil and gas costs, and supply-side disruptions that threaten to swell its import bill and fuel a rise in inflation.
That vulnerability makes it necessary to take prudent measures, the person added.
Earlier this week, Modi call on citizens to reduce fuel consumption, foreign travel and gold purchases to curb capital outflows that are weighing on the rupee.
India is one of the world's largest consumers of gold, which is culturally significant and prized as an investment asset. The precious metal also forms part of the central bank's currency defense war chest, comprising roughly 17% of its forex reserves as of end-March.
The latest policy measures are aimed at protecting the country's forex reserves and narrow the widening trade deficit caused by high energy prices and sustained capital outflows, said Devarsh Vakil at HDFC Securities.
According to the Reserve Bank of India, those reserves stood at $690.69 billion as of May 1.
Like other emerging-market currencies, the rupee has come under pressure in recent weeks as the Middle East conflict buoys haven demand for the dollar. Concerns about oil prices and fiscal pressure have weighed too.
The rupee was last trading at 95.6075 to the dollar, clawing back some ground after hitting another record low on Tuesday. In the year to date, it has depreciated over 6% versus the greenback.
"Combined with rising risk aversion and sustained foreign capital outflows, these factors have positioned the rupee as the worst-performing Asian currency so far this year," HDFC Securities' Vakil said.
Write to Kimberley Kao at kimberley.kao@wsj.com
(END) Dow Jones Newswires
May 13, 2026 01:37 ET (05:37 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments