India's Gold Imports Plummet After Duty Hike

India's gold imports have declined sharply since May 2026 after an increase in import duties, according to Kotak Institutional Equities. The decline is estimated at around 9% relative to global prices, making domestic gold more expensive for consumers.

Kotak said the lower official gold imports could reduce pressure on India's current account deficit and balance of payments. However, a shift to unofficial channels could reduce customs and GST collections without a corresponding decline in underlying gold demand.

The brokerage estimated FY27 gold imports at $88 billion, against $72 billion in FY26. Gold import duties were increased from May 13, 2026, with the total import duty rising to 15% from 6%, and the Agriculture Infrastructure and Development Cess increasing to 5% from 1%.

Kotak also proposed a taxation structure involving higher GST and lower import duties on gold, which it said could affect imports, recycling, and government revenue. The brokerage noted that households may be postponing purchases in anticipation of a possible duty cut or due to stable global and domestic gold prices reducing the investment appeal of gold.