Gold imports in India have declined to around 25-30 tonnes per month from the earlier level of 70-100 tonnes, with the increase in import duty helping reduce import volumes, a government source said on Thursday.
“The duty hike is working,” the source said, adding that the fall in gold imports was also due to factors including high gold prices, lower jewellery demand and increased recycling of gold globally.
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The government had increased the effective import duty on gold from 6 per cent to 15 per cent as part of measures aimed at curbing precious metal imports, easing pressure on foreign exchange reserves and reducing the impact of high import bills.
The source said gold imports have moderated after the duty increase, with monthly inflows now significantly lower than earlier levels.
“It is not only jewellery which would have played the role. The fluctuating trends and demand have also contributed,” the source said.
According to trade data released by the Union Ministry of Commerce, gold imports stood at around USD 5.63 billion in April 2026, before falling to about USD 3.42 billion in May 2026 after the duty hike.
The source said jewellery demand has also weakened amid elevated gold prices, while gold recycling has increased globally.
“Even in very stable economies, gold recycling has increased. Jewellery which was never recycled is being recycled now,” the source said.
On reducing official gold inflows, the source said imports through nominated agencies have reduced as their authorisation was not renewed from April 1.
“Nominated agency import is minimised because we have not renewed the import by nominated agencies,” the source said.
The source also said government is not in favour of gold monetisation as earlier attempts faced challenges as people were reluctant to disclose the source of their gold holdings.
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“Gold monetisation was tried a couple of years ago. The challenge was that people did not want to declare how they got the gold and what was the source,” the source said.
The source also expressed concerns over the use of unofficial channels, noting that gold imported through formal routes continues to be the preferred mode as there is little incentive for diversion in the absence of significant financial gains. According to the source, when the potential payoff from bypassing official channels is limited, the likelihood of diversion remains low, making regular import channels more viable and efficient option for traders and importers.
“It is still bad to come on a regular channel. Coming on this channel, there is no pay-off in any way. If there is no pay-off, there will be no narcotics,” he added.
