The Union Budget 2026–27 has brought clarity—but not relief—for investors, jewellers, and bullion traders tracking customs duty on gold and silver. Amid high expectations from the gems and jewellery industry, the government chose to maintain the existing import duty structure on precious metals. As a result, gold and silver prices will continue to be influenced more by global trends and market sentiment than by any fresh tax intervention in this year’s budget.

In Budget 2026, the government did not announce any revision in customs duty on the import of gold and silver. Importers will continue to pay the same rates that have been in force since the previous major revision.

At present, gold imports into India attract a total customs duty of 6 percent. This includes:

• 5 percent Basic Customs Duty (BCD)

• 1 percent Agriculture Infrastructure and Development Cess (AIDC)

In addition to customs duty, gold is also subject to 3 percent Goods and Services Tax (GST) at the time of sale.

This duty structure was last revised on July 24, 2024, when the government sharply reduced customs duty on gold from 15 percent to 6 percent. That move was widely welcomed by the jewellery industry and helped curb smuggling while improving legal imports. However, in Budget 2026, the government has chosen to keep the duty unchanged.

Silver imports continue to have a differentiated duty structure. For certain eligible Indian residents importing silver under specified conditions, the customs duty is 6 percent, similar to gold. This includes:

• 5 percent Basic Customs Duty

• 1 percent AIDC

However, for other categories of importers, silver attracts a much higher customs duty of 36 percent, comprising:

• 35 percent Basic Customs Duty

• 1 percent AIDC

Like gold, silver is also subject to 3 percent GST.

This dual-duty structure on silver is aimed at regulating imports while discouraging misuse and non-essential inflows.

Ahead of Budget 2026, the gems and jewellery sector had strongly advocated for further rationalisation of taxes. Industry bodies had urged the government to:

• Reduce customs duty on gold and silver further

• Simplify import-related procedures

• Lower GST on jewellery

The All India Gem and Jewellery Domestic Council (GJC) had specifically recommended cutting GST on gold and silver jewellery from 3 percent to 1.25 percent. The industry also sought exemption from capital gains tax on the exchange of hallmarked jewellery, arguing that such reforms would boost demand, transparency, and compliance.

However, none of these demands were addressed in the Union Budget 2026–27, leaving jewellers disappointed, especially at a time when demand remains sensitive to price fluctuations.

Despite no change in customs duty, precious metal prices witnessed sharp volatility on budget day due to profit booking and broader market sentiment.

On the Multi Commodity Exchange (MCX), gold futures for February delivery fell sharply during the session, slipping nearly 9 percent to an intraday low of around ₹1,36,185 per 10 grams. Silver futures for March delivery also declined by about 9 percent, touching an intraday low near ₹2,65,652 per kilogram.

The sharp correction in futures markets spilled over into exchange-traded funds as well. Gold and silver ETFs dropped as much as 16 percent in early trade, reflecting nervousness among investors following recent rallies and budget-related positioning.

From a tax perspective, gold and silver have neither become cheaper nor more expensive due to Budget 2026. Since customs duty and GST rates remain unchanged, there is no direct impact on prices arising from policy changes.

However, actual prices paid by consumers will continue to depend on:

• International bullion prices

• Currency movement

• Domestic demand and supply

• Market sentiment and speculative activity

In the short term, volatility may persist as investors react to global cues, interest rate expectations, and movements in the US dollar.

For long-term investors, the stability in duty structure provides predictability. There is no immediate tax shock, but also no added incentive from the policy side. Jewellery buyers may not see any budget-driven price relief, while traders will continue to track global markets closely.

For the jewellery industry, the unchanged tax regime means operating under familiar conditions, though the lack of GST and duty relief may limit demand recovery in price-sensitive segments.

Budget 2026 has taken a neutral stance on gold and silver taxation. By keeping customs duty unchanged, the government has prioritised stability over stimulus. While this avoids disruption, it also means the precious metals sector will have to rely on market dynamics rather than policy support in the coming year.