India Restricts Silver Imports to Support Rupee Amid Rising Global Prices
After duty hike, government curbs silver imports to aid rupee
The Indian Express
Image: The Indian Express
The Indian government has placed silver imports under a restricted category, requiring prior approval for domestic consumption, following a customs duty hike on precious metals. This move aims to reduce foreign exchange outflow and stabilize the rupee amid rising global prices and ongoing geopolitical tensions.
- 01The customs duty on silver imports was raised to 15%, alongside a similar increase for gold and platinum.
- 02Silver imports for domestic use now require government approval, while those for processing into jewelry remain unrestricted.
- 03India's silver imports surged by 150% to $12.05 billion in 2025-26, despite a 42% increase in volume to 7,334 tonnes.
- 04Gold imports also rose by 24% to $71.98 billion, influenced by a 30% increase in international gold prices.
- 05The measures are part of a broader strategy to manage foreign exchange reserves amid the West Asia conflict.
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In a bid to stabilize the Indian rupee and manage foreign exchange reserves, the government has classified silver imports for domestic consumption as restricted, requiring prior approval. This decision follows a recent customs duty hike on silver and gold, raising duties to 15% and 15.4%, respectively. The government aims to curb the rising outflow of foreign exchange, which has been exacerbated by increasing global prices and geopolitical tensions in West Asia. In the financial year 2025-26, silver imports reached $12.05 billion, marking a 150% increase, while gold imports also saw a significant rise to $71.98 billion despite a drop in volume. The government emphasizes the need to prioritize foreign exchange for essential imports, especially as India's forex reserves have declined by $32 billion in just ten weeks due to the ongoing conflict in West Asia. The measures reflect a strategic approach to managing external economic pressures and ensuring that foreign exchange is directed towards critical needs.
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The restrictions on silver imports are expected to reduce the outflow of foreign exchange, potentially stabilizing the rupee and impacting the prices of precious metals in the domestic market.
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