A quick look at how changes in customs duty in recent Union Budgets influenced gold and silver prices in India.

Gold and silver prices in India are not driven by global markets alone customs duty announced in the Union Budget plays a crucial role. Since India imports most of its gold and silver, any change in import taxes directly affects domestic prices, jewellery demand, and even smuggling.

Over the last five Union Budgets, the government’s stance on precious metals has shifted multiple times:

• Budget 2021: Customs duty on gold and silver was sharply reduced from 12.5% to 7.5% to curb smuggling. A 2.5% Agriculture Infrastructure and Development Cess (AIDC) was introduced, but overall tax incidence fell.
• Budget 2022: No changes were made.
• Budget 2023: Import duty on silver was increased to align it with gold, making silver costlier.
• Budget 2024: Customs duty was reduced again to 6% (5% BCD + 1% AIDC) to discourage illegal imports.
• Budget 2025: Duties remained unchanged.

The rule is simple: higher customs duty means higher domestic prices, and vice versa. However, while duty cuts can temporarily cool prices, gold and silver are ultimately influenced by global factors like geopolitics, currency weakness, and investor demand.

With gold and silver hitting record highs in early 2026, all eyes are now on Union Budget 2026. Any further duty cut could ease prices in India but the relief may be short-lived as global uncertainty continues to fuel the precious metals rally.

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