India's gold imports fell sharply in August after the government raised import duty on precious metals from 6% to 15% in May. According to commerce ministry data, gold imports contracted by 57.75% year-on-year to $2.3 billion. The decline highlights how quickly higher taxes can cool demand in the world's second-biggest gold consumer.
Silver imports, by contrast, rose 127% to $1.02 billion during the month. The divergence between the two metals suggests that buyers redirected spending towards the cheaper metal after the duty increase. Gold is quoted in US dollars per troy ounce (31.1035 grams) on global over-the-counter markets, and Indian importers pay a premium reflecting the customs duty and the rupee exchange rate.
What the data shows
The August figure marks a significant reversal from the previous months. Cumulatively, gold imports during April–August 2026-27 grew 3.38% to $17.47 billion, meaning the early part of the fiscal year was stronger before the duty hike took effect. Silver imports over the same five-month period fell 8.81% to $1.74 billion.
The import duty increase, effective May 13, was aimed at narrowing the current account deficit (CAD) by discouraging purchases of the precious metal. Gold accounts for more than 5% of India's total imports, so swings in its import bill have a direct impact on the trade balance and the rupee.
Source countries and trade flows
Switzerland remained the largest source of Indian gold imports, with about a 40% share. The UAE followed with over 16%, and South Africa supplied about 10%. Total imports from Switzerland fell 45.4% to $1.28 billion in August, in line with the overall decline.
The drop in gold imports is likely to reduce pressure on the CAD in the short term. However, the surge in silver imports partially offsets that benefit. For a country that relies heavily on imports to feed its jewellery industry, the duty-driven slowdown could also affect domestic refining and manufacturing activity.
Key takeaways
- Gold imports fell 57.75% to $2.3 billion in August 2026.
- Import duty on precious metals was raised from 6% to 15% in May.
- Silver imports rose 127% to $1.02 billion in the same month.
- April–August gold imports were up 3.38% at $17.47 billion.
Common questions
Why did India's gold imports fall in August?
The government raised import duty on precious metals from 6% to 15% in May, making gold more expensive for buyers. The higher cost dampened demand, leading to a sharp drop in imports.
How much gold did India import in August?
India imported $2.3 billion worth of gold in August 2026, down 57.75% from the same month a year earlier.
Which countries supply gold to India?
Switzerland is the largest supplier, accounting for about 40% of India's gold imports. The UAE and South Africa follow with shares of over 16% and about 10%, respectively.
The August data shows that import duties are a powerful lever for managing gold demand. Whether the slowdown persists will depend on how consumers and jewellers respond to the new price levels. For now, the duty hike appears to have achieved its immediate goal of reducing gold imports. You can track the live gold price to see how the market reacts to these trade flows.