Budget 2026: How customs duties have shaped gold and silver prices over the last 5 years

As the Union Budget 2026 approaches on February 1, 2026, investors and consumers alike are watching for policy changes that might affect precious metals in India. Over the last five Union Budgets, customs duty rates and regulatory announcements have shaped how gold and silver are priced and traded in the country. These changes influence domestic prices and demand because India relies heavily on imports to meet its requirements for these metals. Following last year’s reduction in gold import duty, the industry expects policy continuity in the upcoming Budget, with possibilities for further calibrated cuts.

In the 2021 Union Budget, the government slashed the basic import duties on gold and silver (bars) to 7.5 per cent from 12.5 per cent. This move aimed to curb smuggling and lower import costs for consumers. Gold futures fell more than 3 per cent following the surprise announcement by Sitharaman. An Agriculture Infrastructure and Development Cess (AIDC) of 2.5 per cent was also introduced on imports of specified precious metals.

During the 2022 Budget, there were no changes to the customs duty on gold and silver. India raised its import duty on gold in July 2022. This reflected continuity in policy after the significant adjustments in 2021, despite industry demands for further reductions, specifically to manage the gap between domestic and international prices.

In the 2023 Union Budget, the government raised the basic customs duty on silver from 7.5 per cent to 10 per cent, with the Agriculture Infrastructure and Development Cess (AIDC) increased from 2.5 per cent to 5 per cent. Finance Minister Nirmala Sitharaman noted the hike aligns silver with gold and platinum duties and increases the duty differential on articles made from precious metals, which rose from 22 per cent to 25 per cent. Following the changes, local silver prices jumped by up to 2 per cent, reflecting immediate market reaction.

In the 2024 Union Budget, customs duties on gold, silver, and platinum were sharply reduced to make precious metals more affordable and curb smuggling. Total duty on gold fell from 15 per cent to 6 per cent, with gold doré reduced from 14.35 per cent to 5.35 per cent. Silver and platinum duties were cut similarly, while the basic customs duty was lowered from 10 per cent to 5 per cent and the Agriculture Infrastructure and Development Cess (AIDC) from 5 per cent to 1 per cent, supporting domestic jewellery manufacturing.

For Budget 2025, the basic customs duty on gold and silver remained unchanged at 6 per cent (5 per cent BCD and 1 per cent AIDC). However, new tariff lines were introduced for gold and silver which could affect future tax treatment and classification of imports. Additionally, duties on jewellery and some platinum findings were reduced, benefiting retailers and consumers.