India’s Gold Imports Plummet Amid Stricter Trade Rules to Support Rupee

India’s gold imports have slowed significantly as banks and bullion traders navigate new government restrictions designed to stabilize the rupee, which has been weakened by the ongoing Middle East war. The Indian government more than doubled gold and silver tariffs to 15% and imposed strict volume caps, limiting tax-exempt imports to 100 kilograms per license with subsequent shipments contingent on exporting half the volume. These austerity measures aim to cushion the economy from inflationary shocks caused by energy disruptions in the Persian Gulf. Although domestic prices have not yet fully reflected these increased costs due to speculators offloading stockpiles, immediate demand remains subdued. Traders report pausing imports or facing a lack of fresh orders, as the duty increase makes importing and selling currently unviable. Despite the drop in physical imports, analysts predict that investment demand through digital gold and ETFs will help maintain India’s annual gold consumption above 700 tons. This regulatory tightening follows administrative bottlenecks and public appeals from Prime Minister Narendra Modi for citizens to reduce gold purchases and conserve fuel.