As Budget 2025 nears, speculation is growing over whether the government will raise gold import duties after last year’s historic 9% reduction led to soaring imports. In November 2024 alone, gold imports skyrocketed to $14.8 billion, worsening India’s trade deficit and pushing the rupee closer to 87 per USD. This has fueled concerns among economists, who argue that increasing import duties could help control the country’s widening deficit.
In the 2024 Union Budget, the government slashed import duties on gold from 15% to 6% and on gold dore from 14.35% to 5.35%. This was the steepest reduction in over a decade, aimed at formalizing gold trade and boosting the domestic jewellery sector. However, it also led to an unexpected surge in demand, driving up overall gold imports and raising concerns over the economy’s stability.
While experts believe a duty hike could discourage excessive imports, the jewellery industry warns that reversing last year's cuts might make Indian jewellery less competitive in global markets and encourage gold smuggling. With Budget 2025 set to be presented by Finance Minister Nirmala Sitharaman on February 1, stakeholders are eagerly awaiting the final decision on gold import duties.
