Impact of Rising Gold Imports on India's Economy
India's gold imports: How it impacts our economy | An explainer
The Economic TimesImage: The Economic Times
India's gold imports surged over 24% to an all-time high of USD 71.98 billion in 2025-26, driven by rising prices and demand from the jewellery industry. This increase impacts the country's trade deficit and current account deficit, prompting calls for government measures to curb imports.
- 01India's gold imports reached an all-time high of USD 71.98 billion in 2025-26.
- 02The rise in imports has contributed to a trade deficit of USD 333.2 billion.
- 03Gold accounts for over 9% of India's total imports, affecting the current account deficit.
- 04The government has imposed import duties and curbs to manage rising imports.
- 05Concerns have been raised about the impact of free trade agreements on gold import surges.
Advertisement
In-Article Ad
India's gold imports have surged by 24% to an unprecedented USD 71.98 billion in the fiscal year 2025-26, up from USD 58 billion in 2024-25. The increase is attributed to rising gold prices, which reached USD 99,825.38 per kilogram in FY26, and heightened demand from the jewellery sector, particularly during geopolitical uncertainties. However, this spike in imports has exacerbated India's trade deficit, which now stands at USD 333.2 billion, and has implications for the country's current account deficit (CAD), which rose to USD 13.2 billion in late 2025. The government has responded by imposing a 15% import duty on gold, which was reduced to 6% in the 2024-25 budget to support the domestic gems and jewellery industry. Experts have called for a review of the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which has facilitated increased gold imports from Dubai, raising concerns about the trade balance as the UAE does not produce gold itself. The government is urged to tighten regulations on gold imports to protect foreign exchange reserves and manage the economic impact of rising gold demand.
Advertisement
In-Article Ad
The increase in gold imports puts pressure on India's trade balance and could lead to higher costs for consumers, particularly in the jewellery market.
Advertisement
In-Article Ad
Reader Poll
Do you think the government should impose stricter regulations on gold imports?
Connecting to poll...
Read the original article
Visit the source for the complete story.
