Indian banks resume bullion imports after month-long halt over 3% levy, sources say

[MUMBAI] Indian banks have resumed gold and silver imports after a hiatus that stretched for more than a month, trade and government sources told Reuters.

It has agreed to pay a 3 per cent customs levy that earlier prompted lenders to halt shipments, the sources added, who were not authorised to speak publicly.

The resumption is expected to boost the country’s gold imports, widen the trade deficit and put more pressure on the rupee – which is among Asia’s worst-performing currencies in 2026.

Worried about mounting pressure on India’s balance of payments and the currency, Indian Prime Minister Narendra Modi on Sunday (May 10) urged people to avoid buying gold for a year to help preserve the country’s foreign-exchange reserves.

Stronger demand from India, the world’s second-largest gold buyer after China, could also support global gold and silver prices and help local jewellers replenish their inventories.

The head of the bullion desk at a Mumbai-based private bank said: “We paid a 3 per cent integrated goods and services tax (IGST) at customs to clear gold and silver shipments.

“Banks waited for more than a month for the government to issue an order that annually exempts them from paying the 3 per cent IGST. But as the government signalled it wanted to curb gold imports, banks gave up hope.”

Banks, which import most of India’s refined gold, halted shipments at the start of the new financial year on Apr 1, after customs authorities began demanding IGST on the metal.

When India adopted the IGST regime in 2017, gold-importing banks were exempted from paying the 3 per cent levy.

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Banks have been clearing gold and silver shipments from customs in recent days, a government official said, declining to be named as he was not authorised to speak to the media.

Banks have cleared about nine metric tonnes of gold and 34 metric tonnes of silver so far in May after paying the IGST, the official said.

Chirag Thakkar, CEO of bullion importer Amrapali Group Gujarat, said that supply has improved due to bank imports but demand remained weak, leaving gold trading at a discount.

Dealers in India offered discounts on gold of up to US$17 for every 28.4 g over official domestic prices this week, inclusive of 6 per cent import and 3 per cent sales levies.

India’s gold imports in April are likely to have fallen to a near 30-year low of about 15 metric tonnes, as banks halted shipments after customs authorities began demanding the IGST. REUTERS