India Hikes Gold Tariffs to 15% to Shore Up Rupee
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- Narendra Modi raised import tariffs on gold and silver from 6% to 15% on Wednesday, after asking Indians in a Sunday speech to stop buying gold to preserve foreign exchange.
- Indian rupee has dropped more than 6% to a record low against the dollar since hostilities broke out in the Strait of Hormuz, with the trade deficit ballooning as energy imports outpace exports.
- India imports 90% of its oil, and every $10-per-barrel crude increase adds roughly $10–15 billion to the country's import bill, per Metals Daily's Ross Norman.
- Udith Sikand of Gavekal Research noted India had approximately 60 days of fuel in its strategic and commercial reserves when the crisis erupted in late February.
- India's gold imports have averaged 83 metric tons this year, up from 53 tons a year ago — a near-doubling in value terms given price appreciation — reflecting purchases of gold "less for adornment and more as an asset of last resort."
- Gold prices still edged up 0.4% to $4,705 per ounce on Wednesday despite the tariff news, with silver climbing 1.6% to nearly $90 per ounce; gold is up 8% year-to-date but 16% off its January all-time high of $5,626.
Why it matters: India is the world's second-largest gold consumer, and the 9-point tariff hike (6% to 15%) targets demand from a key market. But the move lays bare India's energy crisis — 90% oil import dependence, 60 days of fuel reserves, a rupee down 6% to a record low — paradoxically reinforcing gold's safe-haven case.
