India raises gold import duty from 6% to 15%, increasing jewellery prices ahead of wedding season and impacting families, jewellers and gold demand

New Delhi: India’s wedding season may become more expensive after the government increased the import duty on gold and silver from 6% to 15% on May 13, 2026. The sudden move is expected to raise jewellery prices across the country, directly affecting families preparing for weddings and festive purchases. While the government says the decision will help reduce pressure on foreign exchange reserves and support the falling rupee, the jewellery industry fears weaker demand, higher costs, and a possible rise in gold smuggling.

The Indian government increased the effective import duty on gold and silver from 6% to 15% through a notification issued by the Ministry of Finance. The new structure includes a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC). The change came into effect immediately and applies to gold, silver, coins, jewellery findings, and some platinum-related products.

This decision reverses the major duty cut announced in the 2024 Budget, when the government reduced import duty from 15% to 6% to encourage legal imports. The latest hike aims to reduce overseas purchases, lower pressure on India’s foreign exchange reserves, and support the rupee, which recently touched a record low of around 95.63–95.75 against the US dollar due to global uncertainties, rising oil prices, and tensions in West Asia.

Why Did the Government Increase Gold Import Duty?

India is the world’s second-largest consumer of gold. In FY 2026, the country imported gold worth nearly $71.98 billion, the highest ever recorded. Rising global gold prices and strong domestic demand for investment and cultural purposes increased the trade deficit significantly.

On May 10, 2026, Prime Minister Narendra Modi appealed to citizens to postpone non-essential gold purchases for one year. He also advised people to reduce fuel consumption and foreign travel to help conserve foreign exchange reserves during ongoing geopolitical tensions. Although government sources initially denied plans for an immediate duty hike, the official notification was issued shortly afterward.

The government has used similar measures in the past whenever rising gold imports created pressure on the current account deficit. By increasing import duties, authorities hope to reduce demand without completely restricting purchases.

Immediate Impact on the Market

Jewellery Stocks Fall Sharply. After the announcement, shares of major jewellery companies such as Titan Company, Kalyan Jewellers, and Senco Gold fell sharply. Some stocks dropped between 10% and 16%, leading to major losses in market value.

Experts believe organised jewellery brands with stronger domestic sourcing and gold exchange programs may handle the situation better than smaller businesses.

Gold Prices and ETFs Rise

The higher import duty is expected to increase domestic gold prices because jewellers will now pay more for imported gold. As physical gold becomes costlier, investors have started shifting toward gold and silver ETFs, which rose by up to 5% after the announcement.

Industry Warns of Smuggling Risks

Jewellers and industry bodies have raised concerns that higher duties could once again encourage gold smuggling. Smuggling had reduced significantly after the government lowered import duties in 2024. Industry leaders also fear pressure on profit margins and a slowdown in jewellery sales volumes.

How Will the Gold Duty Hike Affect Indian Weddings?

Gold jewellery plays a major role in Indian weddings. Families consider gold a symbol of prosperity, security, and tradition. Bridal jewellery sets, gold coins, and family heirloom purchases often make up a large portion of wedding expenses.

Since the new duty hike came into effect in mid-May 2026, it directly impacts families preparing for upcoming wedding muhurats.

Important Wedding Muhurats in 2026

According to the Hindu calendar, some important wedding periods in 2026 include:

• May 2026: Limited wedding dates around May 13–14 and May 18–19
• June 2026: Several wedding dates between June 19 and June 29
• Peak Wedding Season: October-November during Diwali and Dhanteras, along with winter wedding months
• Popular Gold Buying Days: Akshaya Tritiya and Ganga Dashami remain important occasions for jewellery purchases

Many families start buying jewellery months before weddings. Due to higher gold prices, families may now:

• Buy smaller or lighter jewellery sets
• Choose lower-carat jewellery or designs focused more on craftsmanship than weight
• Exchange or recycle old family jewellery
• Opt for instalment payment plans or gold savings schemes
• Shift toward imitation or gold-plated jewellery in some cases
• Delay non-essential purchases, following the Prime Minister’s appeal

Despite rising prices, cultural demand for gold during weddings usually remains strong. Past trends show that Indian families continue buying gold for weddings even when prices rise, although the quantity purchased may reduce.

Wider Impact on the Jewellery Industry

Consumers Face Higher Costs

Retail gold jewellery prices could rise by 8–10% or more depending on how much of the increased duty jewellers pass on to buyers. This comes at a time when global gold prices are already high.

Pressure on Jewellers and MSMEs

Smaller jewellers and unorganised businesses may face more pressure because they have lower financial flexibility. Organised brands could gain market share because customers trust them more and they offer financing options and exchange schemes.

Impact on the Indian Economy

The government hopes the move will reduce the import bill and strengthen the rupee. It could also encourage more gold recycling within India and increase investments in gold ETFs. In the long term, policymakers may also focus on boosting value-added jewellery exports.

Regional Impact

States with traditionally high gold demand such as Kerala, Tamil Nadu, Andhra Pradesh, and Rajasthan are expected to feel the impact strongly. The affordability gap between rural and urban consumers may also widen.

Criticism and Concerns

Critics say the duty hike puts additional financial pressure on middle-class families during the wedding season. They also argue that the jewellery industry had only recently started benefiting from the 2024 duty reduction, which encouraged legal trade and reduced smuggling.

Supporters of the move, however, say the government must prioritise economic stability, especially during global uncertainty and rising oil prices. Industry experts continue to warn that excessively high duties could once again increase illegal gold imports and hurt legitimate businesses.

What Happens Next?

The gold duty hike clearly shows that the government is focusing on protecting India’s economy and foreign exchange reserves. During the 2026 wedding season, families are expected to adjust by choosing lighter jewellery, exchanging old gold, and using financing options instead of completely avoiding purchases.

Jewellers are also likely to introduce more affordable collections and focus on emotional and cultural value rather than heavy gold weight.

Gold remains deeply connected to Indian wedding traditions, and that emotional connection is unlikely to disappear. However, the latest duty hike highlights the growing balance Indian households must maintain between cultural expectations and rising economic realities.

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