Gold which was Rs 15, 344 per gram on Monday shot up to Rs 16,789 today on Wednesday. In one of the sharpest increases in recent years, the Narendra Modi government has raised customs duty on gold and silver imports from 6% to 15%, while platinum duty has gone up to 15.4%. The move comes as India faces mounting pressure from the ongoing West Asia conflict, rising crude oil prices, and a weakening rupee.
The government claims the decision is necessary to “protect macroeconomic stability” and conserve precious foreign exchange reserves. Officials say India cannot afford massive outflows of dollars on “non-essential imports” like gold, especially when the country is heavily dependent on imported crude oil, fertilisers, defence equipment, industrial raw materials and critical technologies.
The timing is significant. The rupee recently crashed close to an all-time low of 95.68 against the US dollar, intensifying fears over India’s external account and current account deficit (CAD). Gold imports, which are largely driven by consumption and investment demand, are seen as a major contributor to foreign exchange outflow during periods of economic stress.
Prime Minister Narendra Modi has also publicly appealed to citizens to avoid buying gold, postpone foreign trips, reduce fuel consumption, increase car-pooling, and even prefer work-from-home and virtual meetings as part of a broader austerity push. Several state governments and officials have already begun reducing convoy sizes and symbolic expenditures following these appeals.
But the hike has immediately hit ordinary consumers. Gold futures surged over 6% after the announcement, crossing ₹1.63 lakh per 10 grams on MCX, while silver prices jumped nearly 7%. Jewellery is now expected to become significantly more expensive, affecting weddings, household savings, and small investors across India.
Critics argue that while citizens are being asked to sacrifice spending and consumption, VIP culture and government extravagance continue largely untouched. Supporters of the move, however, say difficult global conditions require tough economic decisions to protect India from a deeper financial shock.
The government maintains that this is a temporary but necessary intervention aimed at stabilising the economy, reducing avoidable imports, and shielding the rupee from further damage during an increasingly volatile global crisis.
Also Read: PM Modi Addressed The Nation! Do Not Buy Gold For A Year, Do Work From Home… https://www.vibesofindia.com/pm-modi-addressed-the-nation-said-do-not-buy-gold-do-work-from-home/
