Gold has always been part of Indian culture and savings. Families see it as wealth and security. But with prices crossing ₹1.5 lakh per 10 grams, the government has asked people to pause gold buying. Soon after, import duty on gold and silver was raised to 15%.
This step comes as India’s foreign exchange reserves face pressure. In the last financial year, the country imported nearly 721 tonnes of gold worth $72 billion. Oil imports added another $135 billion. Together, these drained more than $200 billion from reserves. Rising crude prices due to global tensions have made the situation worse.
India’s reserves fell from $728 billion in February to $691 billion by April 2026. Policymakers worry that strong gold demand will weaken the rupee and push inflation higher. For households, gold feels safe. For the economy, every gram imported means more dollars leaving the country.
Past appeals to reduce gold buying have rarely worked. High duties often lead to smuggling, but the government hopes this hike will slow demand. Organised jewellers may gain as buyers prefer certified brands. The larger aim is clear: protect reserves, stabilise the rupee, and safeguard India’s financial strength even if it means asking people to hold back on their love for gold.
