Do you know that the import duty on 1 kg of gold now stands at over Rs 22 lakh? The government has raised import duty on gold to 15% from 6% to curb yellow metal purchase and ease pressure on foreign exchange and gold reserves. The move is expected to affect demand for gold in line with PM Narendra Modi's appeal to Indians to defer all gold purchases for a year to support the weak rupee. 

But the hike in duty has a flip side too. Earlier, import of 1 kg of gold used to attract 6% import duty. For 1 kg gold worth Rs 1.5 crore, one used to pay Rs 9 lakh @6%.

But now, you would have to pay Rs 22.5 lakh in import duty for 1 kg of gold at the revised rate 15%. 

Deepak Shenoy, CEO of Capitalmind Mutual fund in a post on X said the duty hike is likely to lead to a rise in incidents of gold smuggling. Shenoy also mentioned the last time, the duty was hiked, there were incidents of people smuggling gold including an IPS officer's daughter. 

"I hope this is temporary. 1 kg of gold is 1.5 cr and 15% is 22 lakh. 1 kg of gold is tiny tiny. The last time we saw amazing stories of how everyone including an ips officers daughter were smuggling gold in. And probably a lot more that didn't get caught. Welcome to a repeat," his post on X reads. 

Data show India's gold imports climbed over 24 per cent to a record high of $71.98 billion in 2025-26 against $58 billion in 2024-25. In 2023-24, gold imports stood at $45.54 billion, $35 billion in 2022-23, $46.14 billion in 2021-22, $34.62 billion in 2020-21, and $28.2 billion in 2019-20.

A rise in import of the precious metal puts pressure on the country's trade deficit and foreign exchange outgo.

India's trade deficit (difference between imports and exports) rose to $333.2 billion during 2025-26 due to a rise in imports. 

Last time India significantly raised the import duty on gold was in 2012-13. The move was meant to  curb high imports and stabilise the rupee amid a record Current Account Deficit (CAD). The gold import  duty was raised to 10% by August 2013 compared to a mere 2% in January 2012. 

The import duty hike was in response to gold imports rising 87% in early 2013 compared to the previous year, with the CAD touching a high of 4.8% of GDP in 2012-13. But the hike in duty led to the seizure of illegal gold worth Rs 942 crore during April-June 2012 compared with Rs 243 crore during the same period last year.