India gold tariff hike boosts grey market
Analysis based on 6 articles · First reported Jul 30, 2026 · Last updated Jul 30, 2026
The tariff hike is reducing official gold imports and demand, but fueling a grey market that undermines organized trade. Gold prices may face downward pressure from lower demand, while smuggling and illegal inflows could increase.
India raised gold import tariffs to 15% on May 13, 2026, more than doubling the previous rate, to curb demand, reduce trade deficit, and ease pressure on the rupee. The World Gold Council reported on July 30 that this has led to a rise in unofficial gold inflows, widening margins for grey-market operators and hurting organized players. Enforcement agencies seized 160.91 kg of gold between May 13 and June 30, nearly double the 86.16 kg seized in the prior period. Net gold imports fell 23% year-on-year to 98.1 tons in the June quarter, the lowest since September 2020. Gold demand declined 6% to 131.4 tons, with falling jewelry purchases outweighing strong investment demand. The WGC noted that illegal imports could exceed 100 tons in 2026, up from 20.4 tons in 2025. Demand is expected to improve in the second half if prices remain stable.
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