HDFC Mutual Fund has withdrawn the new fund offer (NFO) of its HDFC Gold-Silver Passive Fund of Fund, citing broader national concerns around precious metal imports and their impact on India's external account. According to reports from CNBC TV18, Navneet Munot, MD and CEO of HDFC AMC, stated that the fund house has decided to defer the NFO in light of the broader national conversation around precious metal imports and their impact on the external account. The company is encouraging investors to consider equity and debt mutual funds that channel household savings into productive capacity formation in the Indian economy.
The withdrawal comes after the government raised the effective import duty on gold and silver to 15% from 6%, effective May 13, 2026. As reported by CNBC TV18, the revised duty structure includes a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC). This move partially reverses the customs duty reduction announced in the 2024-25 Union Budget, when import duties on gold were lowered to support the gems and jewellery sector, reduce domestic prices and curb smuggling. The policy follows Prime Minister Narendra Modi's appeal urging citizens to refrain from buying gold and silver for a year, aimed at conserving foreign exchange reserves amid global economic uncertainty. According to The Economic Times, the government views precious metals as non-essential imports that strain the economy, with higher prices already impacting the import bill.
Despite the policy changes, precious metals have demonstrated strong performance in recent periods. In rupee terms, gold has returned 61% while silver has surged 172% over the past year, even as the Nifty 50 declined 5.19% during the same period. According to Value Research, this represents a sensible commercial call after the Prime Minister's appeal and a 15% duty hike in previous metals. However, gold prices surged on Wednesday, May 13, 2026, following the government increase in customs duty from 6% to 15% to curb imports. As reported by The Economic Times, this duty hike is expected to further elevate domestic bullion prices, potentially impacting jewellery stocks and consumer demand, with significant price jumps observed across major brands.
Investor flows into precious metals have accelerated sharply, with silver ETF assets rising from ₹15,477 crore in April 2025 to ₹81,944 crore in April 2026, while gold ETF assets increased from ₹61,422 crore to ₹1.78 lakh crore during the same period. These dynamics have naturally heightened interest and investment flows into precious metal-backed financial instruments. However, the 15% import duty hike may affect jewellery demand and potentially boost smuggling, as reported by The Economic Times, creating additional market complexities for the precious metals sector.
In a separate development, HDFC AMC has appointed Apoorva Jindal as Credit Analyst – Fixed Income and Key Personnel effective May 11, 2026. This strategic appointment comes as the fund house continues to strengthen its fixed income capabilities amid the current market environment. The timing of this appointment suggests HDFC AMC's commitment to building robust fixed income expertise while navigating the challenges posed by the precious metals policy changes.
