Key facts
- India's gold imports increased by 34% to $3.41 billion in May.
- Silver imports dropped by 86.65% to $75.57 million in May.
- The import duty on precious metals was raised from 6% to 15% on May 13.
- India's trade deficit widened to $28.21 billion in May due to higher gold imports.
- Switzerland, UAE, and South Africa are the primary sources of India's gold imports.
India's gold imports surged by 34% year-on-year to $3.41 billion in May, driven by high prices of the precious metal. This increase contributed to the country's trade deficit widening to $28.21 billion for the month. In contrast, silver imports saw a significant decline of 86.65%, falling to $75.57 million from $566.22 million in May of the previous year.
The rise in gold imports occurred despite the government increasing the import duty on precious metals from 6% to 15% effective May 13. The price of gold was hovering near Rs 1,60,000 per 10 grams in the national capital, while silver was priced around Rs 2.60 lakh per Kg.
Switzerland remains the largest source of India's gold imports, accounting for about 40% of the total, followed by the UAE (over 16%) and South Africa (about 10%). Gold imports from Switzerland dipped by 57.73% in May.
For the April-May period of the 2026-27 fiscal year, gold imports rose by 60.14% to $9.04 billion, while silver imports declined by approximately 33% to $486.58 million.
In the full fiscal year 2025-26, India's gold imports had reached an all-time high of $71.98 billion, though the import volume decreased by 4.76% to 721.03 tonnes. India is the world's second-largest gold consumer, with imports primarily serving the jewelry industry.
These import trends have implications for India's current account deficit (CAD). The country reported a current account surplus of $7.1 billion (0.7% of GDP) in the January-March quarter of 2025-26. However, for the entire fiscal year, the current account deficit stood at $25.2 billion (0.6% of GDP).