India has raised gold and silver import duties to 15% from the previous 6%, effective May 13, 2026, through Customs Notification No. 16/2026. The revised structure includes 10% Basic Customs Duty and 5% Agriculture Infrastructure and Development Cess, partially reversing the 2024-25 Budget cut that had lowered gold import duty to 6%. Chief Economic Advisor V Anantha Nageswaran described the West Asia crisis as a 'live balance of payments stress test' with implications for inflation, the current account and the exchange rate. The duty hike addresses pressure on India's external finances, as the country imports nearly all its gold consumption and gold imports accounted for 9-10% of India's total import bill in 2025-26. The government's decision to raise import duties reflects concerns about gold's role in India's current account deficit and the need to reduce reliance on foreign gold purchases.
The Gold Monetisation Scheme (GMS) 2015 was introduced by the Government of India to mobilise idle gold held by households and bring it into the formal financial system. According to reports from The Economic Times, the scheme allows eligible resident Indians to deposit gold, including jewellery, bars, and coins (excluding stones and other metals), and earn interest on such deposits. Resident Indians are eligible to participate, including individuals, Hindu Undivided Families (HUFs), trusts including Mutual Funds/ETFs registered under SEBI regulations, companies, partnership firms, charitable institutions, and central and state government entities. Joint deposits are permitted in accordance with applicable banking rules relating to joint accounts and nomination.
As reported by The Economic Times, following the Government of India press release ID 2115009 dated March 25, 2025, Medium Term Government Deposit (MTGD) and Long Term Government Deposit (LTGD) components have been discontinued with effect from March 26, 2025, including renewals. Currently, deposits can be made under the Short Term Bank Deposit (STBD) category only, for tenures ranging from 1 to 3 years. Deposits for durations outside this framework are not permitted, although deposits may be renewed upon maturity.
According to The Economic Times, deposits are accepted at authorised Collection and Purity Testing Centres (CPTCs) or GMS Mobilisation, Collection & Testing Agents (GMCTAs), where the gold is tested for purity in the presence of the depositor. Upon acceptance, gold is converted into standard gold of 995 fineness and credited to a Gold Deposit Account with a designated bank. Interest on deposits starts from the date of conversion of gold into tradable gold bars or 30 days after receipt of gold at the CPTC/GMCTA, whichever is earlier. The minimum deposit is 10 grams of gold with no upper limit on deposits.
As reported by The Economic Times, at maturity, depositors may choose to receive gold in equivalent quantity or Indian Rupee equivalent of the gold value at the time of redemption. Interest is paid in Indian Rupees with reference to the value of gold at the time of deposit. KYC compliance is mandatory for all depositors unless the depositor is already KYC compliant with the bank. Premature withdrawal provisions for STBD deposits are determined by the designated banks under the scheme.
Malabar Gold & Diamonds has submitted a proposal to the Government of India recommending enhancements to the Gold Monetisation Scheme (GMS). The proposal, submitted by Chairman MP Ahammad to Finance Minister Nirmala Sitharaman and Commerce and Industry Minister Piyush Goyal, recommends lower minimum deposit requirements, easier e-KYC, flexible redemption options and greater participation by organised jewellers. Organised jewellers are likely to push gold exchange programmes, recycled gold and monetisation schemes more aggressively as retail jewellery prices rise quickly due to higher landed costs. Industry experts estimate that even 1% recycling of Indian household gold could reduce imports by 300 tons, representing almost 40% of India's total gold imports annually.
