With the government increasing the custom duty on gold imports, India's gold imports have witnessed a sharp decline with monthly inbound shipments falling by more than 65% to 25-30 metric tonnes (MT) from 75-100 MT earlier, a senior government source said.
The decline comes at a time when the government is also yet to restore banks as designated importers of gold.
According to the source, customs authorities are yet to notify banks as nominated agencies for gold imports from April 1, 2026. Thus, currently there are only three entities, including MMTC, who are authorised to import the precious metal.
"The imports have come down substantially after the duty increase. Earlier, imports were in the range of 75-100 MT per month. They are now around 25-30 MT," the source said.
Gold imports are a closely watched component of India's trade basket as they significantly influence the country's merchandise trade deficit. India is the world's second-largest consumer of gold after China, and domestic demand is largely met through imports.
With West Asia crisis hitting the global economy and to address the depleting forex reserves of India, the government increased the custom duty on precious metal on gold and silver was almost doubled to 18.4% from the previous 9.2%, effective from May 13, 2026.
Industry players have reported softer purchases, particularly in the retail segment, as higher prices and duties have pushed up domestic rates. Additionally, the absence of banks from the list of nominated importers has further tightened the import channel. Traditionally, banks have played a significant role in importing bullion and supplying it to jewellers and traders. With only three agencies currently permitted to import gold, market participants are closely watching whether the government will notify banks again in the coming months.