India Gold Prices Slip Below Pre-Duty-Hike Levels as Global Bullion Retreats
Gold in India has fallen to levels last seen before the government raised import duties in May, despite a sharp jump in the overall tax take on imported bullion.
On June 10, 2026, MCX gold futures slid nearly 2% to ₹149,500 per 10 grams, the lowest since early May. The drop reflects a broad pullback in international gold prices, which has more than offset the higher levy structure introduced on May 13.
Under the May 13 changes, import taxes were reorganized into a 10% basic customs duty plus a 5% Agriculture Infrastructure and Development Cess. Including Goods and Services Tax (GST), the effective tax burden rose to 18.45% from 9.18% previously.
The hike hit demand quickly. Industry estimates put purchases at roughly 7.5 tonnes in the two weeks after the change, down about 70% from nearly 25 tonnes over the same period a year earlier. Jewellers reported a broad slowdown in buying activity.
Smaller, unorganized players have been squeezed the most, given thinner margins and limited ability to absorb an 18.45% effective tax rate without passing costs on to consumers. Larger organized retailers have had more room to manage pricing and inventory.
Higher duties are also reviving concerns over illicit supply. Reports indicate smuggled inflows could top 100 metric tonnes in 2026, a meaningful share in a market where annual demand typically runs in the several-hundred-tonne range. The pattern echoes 2013, when duties were raised to 10% and a surge in illegal imports helped prompt a partial rollback. The current 15% duty exceeds that peak, and the 18.45% effective burden is materially higher.
For investors and traders, the setup is unusual: rupee-denominated prices are at multiweek lows even after a major tariff increase. If global bullion prices stabilize or rebound, domestic prices could adjust higher quickly as the duty premium reasserts itself. A roughly 70% demand slump and the prospect of 100-plus tonnes of smuggled gold are also the type of outcomes that often bring policy back into focus; any reduction in duties would lift legal demand and could push domestic prices higher even if global prices hold steady.
