Tezzbuzz Desk: There may be relief news for those buying gold and silver in the coming days. The central government is considering reducing the import duty on these two precious metals. Actually, the government had increased the import duty to control the import of gold and silver and reduce the pressure on foreign exchange, but its expected effect was not seen. Instead of a big decline in the demand for gold, there has been an increase in gray market and illegal trade. In such a situation, the government is now reviewing its existing policy.
According to the report of Economic Times, Gems and Jewelery Council Chairman Rajesh Rokade has said that the government is discussing a possible reduction in import duty. However, no final decision has been taken on this yet. According to him, the industry had already warned the government that excessive taxes could encourage illegal business. Now the same situation is visible in front of the government, because despite the higher duty, there has been no expected reduction in the demand for gold.
In May this year, the central government had increased the custom duty on gold and silver from 6 percent to 15 percent. The decision was aimed at controlling imports and reducing pressure on the country's foreign exchange reserves amid ongoing tensions in West Asia. The government had hoped that the increase in import duty would reduce the purchase and import of gold, but due to the high tax, the official business has been affected and the scope of the gray market has also increased. The demand for gold in India is very strong. India is the world's second largest gold consumer after China. A large quantity of gold is imported into the country every year. According to government data, India's gold imports increased by 24 percent to a record level of $ 71.9 billion in fiscal year 2026. However, in quantity terms the imports declined to 721 tonnes. This shows that despite rising prices in the international market, the demand for gold remains in India.
In India, gold is not just a means of investment, but purchase of jewelery during weddings and festivals is also a major reason for its demand. In such a situation, any reduction in import duty can have an impact on the domestic market and jewelery business. If the government reduces the duty, then some relief can be expected in the prices of gold and silver. However, the actual fall in prices will also depend on the price in the international market, the position of the rupee against the dollar and other taxes. Amid the discussion of reduction in import duty, a fall in gold prices was also seen in the domestic futures market on Monday. Due to weak spot demand, the price of gold fell by Rs 2,045 in future trade to around Rs 1,54,236 per 10 grams. In such a situation, the market is now eyeing the next step of the government. If the government decides to reduce the import duty, it can have a direct impact on customers, jewelers and the entire bullion market.