Gold Imports Plummet in India: What it Means for the Economy

India's gold imports have plummeted since May 2026, but experts say this decline may not be entirely good news. Kotak Institutional Equities suggests that higher import duties introduced on May 13 could be behind the drop in demand, resulting in a 9% rise in domestic gold prices relative to global prices.

The brokerage firm pointed out that stable global and domestic gold prices may also have reduced gold's investment appeal, citing a sharp decline in gold ETF flows since February 2026 as evidence. Kotak noted that this could indicate a 'permanent' reset in household demand for gold.

However, there are concerns that the decline in official imports may simply reflect a temporary slowdown in purchases by Indian households or even a diversion of gold imports to unofficial channels. This would mean that actual imports may be higher than reported and could hurt government revenues through lower customs and GST collections.