Gold, Silver Prices: Gold and silver prices shot up on the Multi Commodity Exchange (MCX) on May 13 after the government increased the import duty on precious metals such as gold, silver and platinum.
As of 9:30 AM, the MCX gold June futures contract jumped as much as 7 per cent, or by Rs 11,055, to Rs 1,64,497 per 10 grams. Meanwhile, the MCX silver July futures contract rallied around 8 per cent, or Rs 22,367, to Rs 3,01,429 per kg.
The government has increased customs duty on imports of precious metals such as gold, silver and platinum as part of efforts to curb foreign purchases and ease pressure on the country’s foreign exchange reserves. The move comes amid rising global uncertainty due to the ongoing West Asia crisis.
The government has raised import duty on gold and silver from 6 per cent to 15 per cent, and on platinum from 6.4 per cent to 15.4 per cent. It has also revised duty rates on products such as gold and silver dore, coins and findings.
The decision comes just days after Prime Minister Narendra Modi urged citizens to avoid buying gold for a year in a bid to help conserve India’s foreign exchange reserves.
The duty hike also comes at a time when global crude oil prices and shipping routes are facing uncertainty due to tensions in West Asia.
India Relies Heavily On Gold Imports
India continues to rely heavily on imports to meet its gold demand. According to data from Ministry of Commerce, the country’s gold imports rose 24 per cent in FY 2025–26 to a record $71.98 billion.
Demand for the yellow metal, particularly as an investment asset, has strengthened amid a sustained rally in gold prices and subdued returns from equities over the past year.
Data from the World Gold Council showed that India’s total gold demand increased 10 per cent year-on-year to 151 tonnes in the March quarter. In value terms, demand nearly doubled to a record Rs 2.27 lakh crore, or $25 billion.
Investment demand remained the key growth driver, rising 54 per cent year-on-year to 82 tonnes, while the value of investment demand surged 179 per cent.
India also remained one of the largest contributors to global gold demand, ranking second worldwide in both jewellery and investment demand during the quarter.
How Gold And Crude Imports Are Weighing On The Rupee
However, this demand for gold also increases India’s import bill. Gold and silver together accounted for nearly 11 per cent of the country’s total imports, while crude oil and petroleum products made up around 22 per cent.
India imports nearly 85 per cent of its fuel requirements and depends heavily on the Strait of Hormuz for energy supplies.
Higher crude oil prices and supply disruptions are expected to widen India’s trade deficit and current account deficit. These concerns have also weighed on the rupee, which has weakened more than 12 per cent against the US dollar and touched a record low of 95.83 in recent days.
On May 13, the rupee traded weaker against the US dollar, with the USD/INR pair hovering around 95.54 in early trade.
