India’s gold imports remained unusually strong in May 2026 despite a steep hike in import tariffs and record-high prices, reflecting the country’s deep cultural and investment desire for the precious metal. Meanwhile, silver imports fell as new limitations and increased taxes significantly reduced inflows.
Key figures Gold imports surged 34% year-over-year to $3.41 billion in May 2026. Silver imports dropped 86.65% to $75.57 million, the lowest amount in more than three years. For the first two months of fiscal year 2026–27 (April–May), gold imports rose more than 60% to $9.04 billion. Why gold demand stayed robust Wedding and jewelry demand is a big driver of purchases in India, the world’s second-largest gold consumer after China. Gold continues to be considered as a store of wealth and inflation hedge, making buyers less sensitive to price hikes. The government’s rise in import tariff from 6% to 15% appears to have had only a minimal short-term impact on demand. Why silver imports collapsed
The fall in silver imports was mostly policy-driven:
India implemented stronger controls on silver imports and classed many kinds of silver as prohibited commodities requiring authorization. The same import-duty rise to 15% made silver imports substantially more expensive. Despite reduced imports, domestic demand remains there, forcing local premiums to grow because supply has become harder to get. Economic ramifications
India’s merchandise trade deficit increased to $28.21 billion in May as a result of the spike in gold imports. Large imports of bullion put strain on the current account balance and foreign exchange reserves, which is one of the reasons authorities initially increased taxes.
Things that investors ought to be aware of
According to the data, Indian demand for gold is robust even at high prices, which may offer underlying support for the world’s gold markets. The recent decline in Indian imports of silver seems to have been caused more by regulations than by a decline in end-user demand, thus if limitations are loosened, import levels may rebound.
