Impact of Rising Gold Imports on India's Economy: An Analysis
India's gold import: How it impacts our economy | An explainer
The Economic Times
Image: The Economic Times
India's gold imports surged over 24% to an all-time high of $71.98 billion in 2025-26, driven by rising prices and demand from the jewelry industry. This increase has raised concerns about the trade deficit and current account deficit, prompting calls for austerity measures from Prime Minister Narendra Modi.
- 01Gold imports reached a record $71.98 billion in 2025-26, up from $58 billion in 2024-25.
- 02The trade deficit rose to $333.2 billion due to increased gold imports.
- 03India's current account deficit increased to $13.2 billion, or 1.3% of GDP.
- 04The government has imposed import duties and curbs to manage rising gold imports.
- 05Dubai's share of India's gold imports surged from 7.9% to 28% following the India-UAE trade agreement.
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India's gold imports have dramatically surged, reaching $71.98 billion in 2025-26, a 24% increase from the previous fiscal year. This spike is attributed to rising gold prices, which climbed from $76,617.48/kg to $99,825.38/kg. The jewelry industry remains the primary driver of this demand, especially during periods of geopolitical uncertainty. The increase in imports has significantly impacted India's trade balance, pushing the trade deficit to $333.2 billion and contributing to a current account deficit of $13.2 billion, or 1.3% of GDP. The government has responded with measures including import duties and curbs to mitigate the economic impact. Notably, the UAE has become a major source of gold imports, accounting for 28% of the total, following favorable tariff agreements. Experts are calling for a review of these trade agreements to protect India's economic stability.
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The surge in gold imports is straining India's trade balance, leading to higher trade and current account deficits, which could affect economic stability and currency valuation.
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