India Triples Gold Import Duty to 15% as Rupee Hits Record Lows and Trade Deficit Tops $330 Billion

India, the world's second-largest gold consumer, has seen surging demand for bullion, with average monthly gold imports rising to 83 tonnes in early 2026 from 53 tonnes in 2025. Gold demand nearly doubled year-on-year in the first quarter of 2026 to a record $25 billion. Now, the government has raised import duties on gold and silver from 6% to 15%, comprising a 10% basic customs duty and a 5% additional tax, days after Prime Minister Modi urged citizens to stop buying gold for one year. The move comes as India's merchandise trade deficit exceeded $330 billion in the financial year ending March 2026, up from $280 billion a year earlier. Gold and silver represented nearly 11% of total imports. Higher energy costs from Middle East disruptions have weakened the rupee to record lows, since India relies on the Strait of Hormuz for roughly 50% of its crude imports, 60% of its liquefied natural gas, and nearly all its liquefied petroleum gas supplies.