India’s April gold imports are set to fall to a near 30-year low of around 15 metric tons, industry and government sources said, because banks have been hit by an unexpected tax demand.
Banks, which import most of India’s refined gold, have halted shipments since Indian customs began demanding a 3% integrated goods and services tax on the metal, said Surendra Mehta, secretary at the India Bullion and Jewellers Association.
In 2017, when India adopted the IGST, gold-importing banks were exempted from paying the 3% levy. The tax demand now being imposed on banks follows a delay in issuing a formal government order authorising bullion imports by banks, Reuters reported earlier this month.
“Banks did not clear any gold from customs this month. A small quantity was cleared via the India International Bullion Exchange (IIBX),” said a government official, who declined to be named as they were not authorised to talk to the media.
India’s tax authorities did not immediately respond to a request for comment on the IGST now being sought on gold imports by banks.
India, the world’s second-largest gold consumer, imported 35 tons of gold in April 2025 and averaged about 60 tons a month in the 2025-26 fiscal year to March.
The 15-ton figure for April is the lowest for the month in around three decades, excluding 2020 when the COVID-19 pandemic forced Indian jewellery shops to close, and could weigh on global gold prices, the sources said.
India likely spent about $1.3 billion on gold imports in April, well below the monthly average of $6 billion in the last fiscal year, bank bullion dealers said, despite Indians celebrating Akshaya Tritiya, the second-biggest gold buying festival after Dhanteras, on April 19.
“Supplying banks brought gold into India in anticipation of demand during the Akshaya Tritiya festival, but it is now lying in vaults,” said a Mumbai-based bullion dealer at a private bank, adding that about 8 tons of gold was parked in vaults.
Banks will only clear them after customs officials allow shipments without demanding GST, the dealer told Reuters. The sources said India’s GST demand on gold, along with the earlier delay in authorising banks to import bullion, could be aimed at slowing gold imports to help narrow the country’s trade deficit and support the rupee, which has been one of the worst-performing Asian currencies so far this year.
Imports of gold dore, a semi-pure alloy, were also hit hard in April as refiners struggled with the government rejecting or deferring new import licence applications, said Harshad Ajmera, a refiner based in the eastern city of Kolkata.
Jewellers had begun sourcing imported gold from the IIBX after banks halted imports, although volumes were small, said Chanda Venkatesh, managing director at CapsGold, a bullion merchant based in the southern city of Hyderabad.
