Budget 2026 Cuts Gold and Silver Import Duty to 5%

On 1 February 2026, the Union Budget cut the basic customs duty on gold and silver from 6% to 5%. It is a smaller move than the previous year, but it lands on top of a much larger one, and it changes the landed cost of every gram of imported metal.

What changed

Two measures matter for the bullion and jewellery trade:

1. Basic customs duty on gold and silver was reduced from 6% to 5%.
2. The duty-free allowance for jewellery carried by travellers was eased, to 40 g for women and 20 g for men, with the earlier value cap removed.

For context, the Budget of 2025 had already cut the gold duty from 15% to 6%, the steepest single reduction on record. The 2026 cut is a further, smaller step in the same direction.

The immediate price effect

Import duty feeds straight into the domestic price, so the market reacted within a day. On the announcement, 24-carat gold fell by around ₹4,000 per 10 g, and silver fell by about ₹4,500 per kg, as the lower duty was priced in.

Why import duty moves the price at all

Gold and silver in India are largely imported, so the retail price is built up in layers: the international price, the rupee-dollar exchange rate, customs duty, GST, making charges, and the jeweller's margin. Duty is one of the few layers the government sets directly. Lowering it reduces the landed cost for every importer at once, which is why a duty change shows up in showroom prices almost immediately, while making charges and margins vary from shop to shop.

What it means for buyers

A lower duty makes gold and silver marginally cheaper than they would otherwise be, but it is a small factor next to the international price and the rupee, both of which moved far more than one percentage point of duty during 2026. When you buy, the duty is already baked into the rate, so the things to check remain the same: verified purity through a BIS hallmark and HUID, and an itemised invoice showing metal weight, purity, making charges, and taxes.

What it means for the trade

For jewellers and importers, the cut trims input cost slightly and, alongside the eased traveller allowance, is aimed at pulling more of the trade through formal, duty-paid channels rather than informal ones.