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India Doubles Gold and Silver Imports Despite Rising Prices and Expected Tariff Hikes


Gold Prices

Wed 01 Oct 2025 | 07:56 PM
Waleed Farouk

India recorded a significant surge in gold and silver imports during September, with quantities imported almost doubling compared to August, despite record high global prices. This comes as banks and jewelry traders rushed to stock up massive quantities in preparation for the festival season and in anticipation of a tariff hike by the end of the month.

A government official, who preferred to remain anonymous, told Reuters that "banks and jewelry traders have cleared large quantities of gold from customs over the past two weeks, in a rush we haven't seen in years," noting that the government expects more customs clearances on the last day of the month, in anticipation of an imminent increase in the basic import duties on both gold and silver.

The Indian government reviews the basic import price twice a month, and this price is used to calculate the value of customs duties due on imports.

Proactive Stockpiling Before Tariff Hike

For his part, Chirag Thakkar, CEO of Amrapali Group, a prominent precious metals importer in Gujarat state, explained that "banks and bullion dealers are racing against time to clear imports before the new basic price is applied on Wednesday."

He added: "Despite gold and silver prices reaching record levels, investment demand remains very strong, and we have doubled our purchases of both metals in September compared to the previous month."

Potential Economic Repercussions

Analysts warned that this significant increase in imports could exacerbate the weakness of the Indian Rupee and deepen the trade deficit.

Trade Ministry data shows that in August, India spent about $5.4 billion to import 64.17 tons of gold, and $451.6 million to import 410.8 tons of silver. September data is expected to be released in mid-October.

Traders noted that Indian jewelers had refrained from buying in recent months awaiting a price correction, but they were recently forced to buy at high prices to meet the increasing demand before the festival season, primarily Diwali in October, during which buying gold is considered a symbol of luck and prosperity.

High Price Premiums in the Local Market

Indian traders this week imposed a premium of up to $8 per ounce over official local prices, which include a 6% import duty and a 3% sales tax.

A bullion dealer in Singapore said: "Strong demand from India surprised global markets, especially given the subdued demand in China at these price levels."

A Paradox with the Chinese Market

In contrast, traders in China expanded their discounts on gold this month to range between $31 and $71 per ounce below international benchmark prices, the largest decline the country has seen in several years, reflecting slower Chinese demand compared to India.

This surge in India's gold and silver imports reflects a strong appetite for investing in precious metals despite record prices, driven by seasonal cultural and religious factors and expectations of rising tariffs, making India a key supporting factor for global markets during the last quarter of the year.