India has sharply raised customs duties on gold and silver, pushing the effective import tax burden from 9.18 per cent to 18.45 per cent, he said.
In a Linkedin post he gave a breakup of the duties.
What Changed?
Earlier: 5 per cent basic customs duty and 1 per cent agriculture infrastructure and development cess, taking total customs duty to 6 per cent. Including 3 per cent IGST the effective duty was 9.18 per cent.
Now: The basic custom duty has been increase to 10 per cent from 5 per cent, while the agriculture infrastructure and development cess has been increased to 5 per cent from 1 per cent, taking the total customs levy to 15 per cent. Including IGST, the effective duty jumps to 18.45 per cent.
In simple terms, bullion worth Rs 100 earlier attracted taxes of about Rs 9.18. The same shipment will now face taxes of roughly Rs 18.45, Srivastava said.
Why the Government Acted
The move comes amid a sharp rise in precious metal imports. India imported nearly USD 72 billion worth of gold in FY2026, up around 25 per cent year-on-year. Silver imports crossed USD 12 billion, recording an extraordinary 150 per cent annual increase.
The UAE FTA Angle
The duty hike significantly changes the economics of imports routed through the United Arab Emirates under the India–UAE Comprehensive Economic Partnership Agreement (CEPA).
Silver imports from the UAE currently attract only 7 per cent duty. India’s new MFN tariff is now 15 per cent. This creates an 8-percentage-point tariff arbitrage for silver routed via Dubai. That gap will widen further as UAE silver tariffs gradually fall to zero by 2031 under CEPA commitments.
Gold imports from the UAE also receive preferential access through a Tariff Rate Quota (TRQ) system. Under this mechanism: UAE gold enters India at tariffs 1 percentage point lower than MFN rates. The quota started at 120 tonnes in 2022 and will rise to 200 tonnes by 2027. With the revised tariff structure, UAE gold imports under quota would attract 14 per cent duty versus 15 per cent for regular imports. The widening tariff gap could encourage greater routing of global bullion through Dubai — even though the UAE is not a major miner of gold or silver.
