The Indian government’s decision to increase the import duty on gold and silver has probably led to increased smuggling, with data showing a manifold jump in seizures of smuggled consignments of the precious metals.
On May 13, the Government more than doubled the Customs duty on gold and silver to 15 per cent from 6 per cent, including 5 per cent Agriculture and Infrastructure Development Cess.
The seizure of silver consignments increased by more than 10 times between May 13 and June 30 compared with the April 1-May 12 period. On the other hand, gold consignment seizures jumped 186 per cent during the period, data provided by the Government in the Lok Sabha showed.
Rise after the dip
Responding to a question in the Lok Sabha, Minister of State for Commerce and Industry Jitin Prasada said the number of cases filed for smuggling increased to 267 between May 13 and June 30 this year. The amount of gold seized was 160.91 tonnes, while 116 persons were arrested.
In comparison, seizures from April 1 to May 12 were 86.16 tonnes with 165 cases filed and 67 persons arrested.
Gold smuggling had declined sharply from 6,599 cases in 2023-24 to 3,005 in 2024-25. This dropped by over 75 per cent in 2025-26. The amount of gold seized and the number of arrests also declined.
In the case of silver, the number of arrests jumped to 8 during the April 1-May 12 period, while thereafter only 2 arrests were made. However, the number of cases increased to 16 from 7. Silver, too, saw a sharp decline in smuggling during 2025-26 to one-fifth of 2024-25 cases.
Continuously monitored
Prasada said customs field formations and DRI maintain constant vigil and operational readiness to prevent and detect smuggling activities, including smuggling of gold and silver.
“Such risks are continuously monitored and addressed through enforcement measures under the extant legal framework,” he said.
Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Ltd., President of India Bullion and Jewellers Association Ltd, said that in the 7 weeks after the duty hike, gold seizures jumped nearly 60 per cent and silver seizures rose almost nine-fold on a per-day basis.
“That’s not noise — that’s a clear signal that higher import duty is pushing more gold and silver through informal channels rather than official ones,” he said.
The government’s reply in the Lok Sabha tells a “more honest story”: when the price of doing things legally goes up, some of that trade simply goes underground.
“Enforcement can catch more of it, but it can never catch all of it,” he said.
The government raised the import duty on gold and silver to conserve foreign exchange reserves, curb non-essential imports, and protect the rupee amid growing global economic pressures. Gold, which soared to a record high of $5,608 an ounce on January 29 has since shed over 27.5 per cent of its gains. On Tuesday, it was quoted at $4,082 an ounce.
Published on July 21, 2026
