Government Hikes Gold, Silver Import Duty to 15% to Ease Forex Pressure

The Centre has sharply raised import duties on gold and silver to 15% from 6%, effective Wednesday, in a bid to curb overseas purchases and support the rupee, which touched a record low amid geopolitical tensions.

The decision comes days after Prime Minister Narendra Modi urged citizens to refrain from buying gold jewellery for a year in the national interest, as India grapples with widening trade deficits and pressure on foreign exchange reserves.

 Duty Structure Revised

The government has imposed a 10% Basic Customs Duty along with a 5% Agriculture Infrastructure and Development Cess (AIDC) on imports of gold and silver. This effectively doubles the earlier levy, making the metals significantly costlier for importers.

Industry sources said the move follows the reduction of duties to 6% in the 2024 budget. Officials familiar with the matter indicated it aims to moderate non-essential imports at a time when the country is the world’s second-largest consumer of gold.

 Prices Surge in Futures Market

Following the announcement, gold and silver futures on the Multi Commodity Exchange (MCX) jumped sharply. Gold prices rose by around ₹9,000-₹9,700, crossing ₹1.63 lakh per 10 grams in some contracts, while silver gained nearly ₹18,000, hovering close to ₹3 lakh per kg.

Physical market prices are also expected to reflect the higher landed costs soon, potentially affecting retail jewellery demand across the country.

Rupee Under Strain

The rupee had hit an all-time low of ₹95.50-₹95.63 against the US dollar earlier this week, weighed down by soaring oil prices linked to the US-Iran conflict and persistent foreign investor outflows.

By reducing gold and silver imports, which account for a substantial part of the import bill, the government hopes to ease pressure on reserves. In recent months, India has been importing an average of around 60 tonnes of gold monthly, contributing billions of dollars to the current account deficit.

Industry Reactions and Concerns

Bullion traders and jewellers have expressed mixed views. Surendra Mehta, National Secretary of the India Bullion and Jewellers Association, noted that the step was taken to control the current account deficit but could dampen demand given already elevated prices.

Some industry insiders in Mumbai warned that higher duties might revive smuggling networks, which had subsided after the previous reduction in levies. A private bank bullion dealer pointed out potential profit margins in unofficial channels at current price differentials.

Jewellery stocks reacted negatively on Tuesday, with shares of companies like Kalyan Jewellers, Senco Gold, Titan, and others falling between 7% and 10%.

Imports Likely to Hit Multi-Year Low

Analysts expect gold imports to drop significantly. Reports suggest April imports could touch a 30-year low, with banks already slowing shipments amid additional tax uncertainties.

India imports nearly all its gold requirements, with the annual bill running into lakhs of crores. The move is seen as part of broader efforts to promote austerity and conserve foreign exchange during uncertain global times.

Impact on Consumers and Markets

For ordinary buyers, especially ahead of the wedding season, the duty hike translates into higher prices for jewellery and coins. Local jewellers in major markets like Mumbai, Delhi, and Chennai are likely to pass on the costs, though some may absorb part of it initially to maintain sales.

The development follows PM Modi’s public appeal on May 10 and 11, where he recalled how people donated gold during crises and called for restraint in purchases for national interest. His remarks had already triggered some caution among buyers in states like Gujarat.

What Lies Ahead

Finance Ministry officials have not issued further detailed comments, but the timing suggests a coordinated policy response to external shocks. Markets will closely watch the impact on overall precious metals demand and the rupee’s trajectory in the coming days.

Whether this curbs imports effectively or pushes more activity underground remains to be seen. For now, the higher duties have immediately made gold and silver more expensive, reinforcing the government’s message of fiscal prudence amid challenging times.

Pakistan received a crucial financial lifeline as Saudi Arabia transferred $1 billion, completing a $3 billion assistance package aimed at stabilising the country’s fragile economy. The latest tranche was credited on April 20, 2026, according to confirmation from the State Bank of Pakistan.

This development comes at a time when Pakistan continues to grapple with severe external financing challenges and mounting debt obligations, making the inflow a significant boost to its foreign exchange reserves.

Package Details Clear

The $3 billion support package was disbursed in two instalments. The first tranche of $2 billion was transferred on April 15, followed by the final $1 billion payment five days later.

Officials indicated that the funds were part of Saudi Arabia’s broader commitment to support Pakistan’s macroeconomic stability, particularly as the country remains under scrutiny for meeting international financial obligations.

Economic Pressure Mounts

Pakistan’s economic situation has remained under stress due to rising external debt and persistent fiscal deficits. The government has been under pressure to ensure timely repayments while managing domestic financial constraints.

As per available data, the country’s foreign exchange reserves stood at $16.4 billion as of March 27, barely sufficient to cover three months of imports. This level is often considered a critical threshold for economic stability.

IMF Conditions Factor

The inflow of Saudi funds is expected to help Pakistan meet key benchmarks set under its ongoing programme with the International Monetary Fund (IMF). Strengthening foreign reserves remains a core requirement for maintaining IMF support.

Sources indicated that without such external assistance, Pakistan could face difficulties in complying with strict fiscal and monetary conditions imposed under international lending frameworks.

UAE Loan Concern

Adding to the pressure is the repayment obligation to the United Arab Emirates (UAE), which recently sought the return of $3.5 billion in loans extended to Pakistan.

According to reports, this marks the first such demand in seven years, raising concerns over liquidity management and near-term financing gaps. The move has further complicated Pakistan’s external financing outlook.

Strategic Angle Discussed

There has been speculation in policy circles that Saudi Arabia’s swift disbursement may also be linked to broader geopolitical considerations, including Pakistan’s recent military cooperation in the region.

However, no official confirmation has been issued on any strategic linkage, and authorities have maintained that the assistance is purely economic in nature.

What Lies Ahead

While the Saudi aid provides immediate relief, analysts caution that Pakistan’s structural economic challenges remain unresolved. Sustained reforms, improved revenue generation, and reduced reliance on external borrowing will be critical in the long run.

The latest development remains a key Latest News Today highlight in global financial circles, reflecting the fragile balance of Pakistan’s economy.

For now, the Saudi assistance offers temporary breathing space, but the road ahead will depend on policy execution and continued international support.

This Public Interest Story is also trending across platforms as part of Trending News India and global economic updates.

RBI Keeps Repo Rate Unchanged at 5.25% After US-Iran Ceasefire

The Reserve Bank of India (RBI) has kept its repo rate unchanged at 5.25 per cent, offering relief to borrowers as the Monetary Policy Committee (MPC) assessed the lingering effects of the recent US-Iran war ceasefire.

RBI Governor Sanjay Malhotra announced the decision on Wednesday, 8 April 2026, marking the second consecutive hold on the key policy rate. The central bank has projected CPI inflation for FY27 at 4.6 per cent and GDP growth at 6.9 per cent, signalling cautious optimism amid global uncertainties.

RBI MPC Decision Announced

The MPC, in its April 2026 review, voted to maintain the status quo on the repo rate, which now stands at its lowest level in three years and eight months. This is the eighth policy meeting under Governor Malhotra, who took charge in December 2024.

Inflation Projections for FY27

The RBI has revised its inflation outlook with quarterly estimates of 4.0 per cent in Q1, 4.4 per cent in Q2, 5.2 per cent in Q3 and 4.7 per cent in Q4. For the full fiscal, the average projection stands at 4.6 per cent, reflecting contained pressures despite external risks.

GDP Growth Forecast Set

On the growth front, the central bank expects GDP to expand by 6.9 per cent in FY27, with quarterly projections of 6.8 per cent in Q1, 6.7 per cent in Q2, 7.0 per cent in Q3 and 7.2 per cent in Q4. The forecast comes as India navigates post-ceasefire global commodity swings.

Geopolitical Risks Highlighted

Governor Malhotra noted that the West Asia conflict, even after the ceasefire, continues to pose challenges through elevated crude oil prices and potential weather disturbances. He flagged an uncertain near-term inflation outlook due to volatility in global oil and commodity prices, which could still weigh on India’s growth trajectory.

Forex Reserves Stay Robust

India’s foreign exchange reserves remained healthy at $696.1 billion as of 3 April 2026, providing a strong buffer against external shocks. The RBI chief also highlighted that gold prices have moderated amid easing geopolitical tensions.

Market Reaction Positive

Ahead of the announcement, Indian equity benchmarks opened sharply higher, with the Sensex gaining over 2,700 points and the Nifty climbing 750 points. Realty, auto and financial shares led the rally. The rupee strengthened by 50 paise to 92.56 against the US dollar, reflecting investor confidence in policy continuity.

Neutral Stance Maintained

The MPC retained a neutral stance, keeping options open for future rate adjustments based on incoming data. This follows a cumulative 1.25 per cent repo rate cut since February 2025, which has already eased borrowing costs across the economy.

Home loan EMIs will not rise for now, bringing comfort to millions of borrowers and supporting consumption and investment demand. The unchanged RBI repo rate is expected to sustain momentum in the housing and auto sectors while keeping overall lending rates stable.

According to officials, India continues to remain an attractive destination for foreign investors despite global headwinds. The RBI’s balanced assessment underscores the central bank’s focus on supporting growth while guarding against inflation risks from international developments.

As the dust settles on the US-Iran ceasefire, the RBI’s April 2026 policy reinforces stability in India’s monetary framework. With the repo rate unchanged at 5.25 per cent, the central bank has signalled preparedness to navigate both domestic and global challenges in the coming quarters.