- Government sources have given a clear rationale for raising import duties on gold, silver, and platinum
- Move aims to shield India's current account from crude oil and global supply disruptions due to Iran-US war
- PM Modi has urged citizens to defer gold purchases and reduce fuel consumption amid crisis
Government has offered its clearest rationale yet for hiking import duties on gold, silver and platinum, with sources telling NDTV Profit the move is a deliberate forex conservation measure — designed to insulate India's current account from the compounding pressures of elevated crude oil prices, West Asia-linked shipping disruptions, and a global environment that Prime Minister Narendra Modi has compared to the Covid-19 crisis.
Speaking in Vadodara on Monday, Modi sharpened an appeal he had made earlier, urging citizens to defer gold purchases, reduce fuel consumption, work from home where possible, and avoid personal spending that draws on foreign exchange. "Whenever India faced war or any major crisis, citizens fulfilled responsibility on government appeal; we need to do same now," he said, invoking the country's historical record of collective restraint during periods of national stress.
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The PM drew a direct line between the US-Iran war and previous shocks, describing the current moment as the latest in a sustained sequence of global instability. India, he made clear, was not immune.
Government sources said the duty hike on precious metals is the policy expression of precisely that concern. With forex resources under potential strain, sources said the government has prioritised reserves for what it considers non-negotiable imports — crude oil, fertilisers, defence procurement and capital goods. Precious metal imports, sources noted, are predominantly consumption and investment-driven, with high forex outflows and limited essential-import value.
The measure, sources were careful to stress, is a price-based disincentive rather than a prohibitory one — a calibrated signal, not a hard stop. India, they said, has opted for moderate duty adjustments over blunter import restrictions, consistent with how it has historically managed external-sector pressures.
The context makes the reversal especially pointed. Gold and silver duties were cut from 15% to 6% in the Union Budget of 2024–25, when global conditions were stable and the current account position was comfortable.
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