Keralam jewellers seek review of gold, silver import duty structure

Tue July 28 2026

The Kerala Gold and Silver Merchants Association (KGSMA) has urged the Centre to immediately review and rationalise the existing import duty structure on gold and silver, warning that higher duties are fuelling smuggling and hurting the legitimate bullion and jewellery trade. Government data presented in Parliament indicate a sharp rise in gold and silver smuggling following the increase in import duty on the precious metals from 6 per cent to 15 per cent, according to S. Abdul Nazar, State General Secretary of the association.

He said that gold smuggling cases have increased significantly since the duty hike, while silver smuggling has witnessed an even steeper rise, with seizures increasing manifold. Despite intensified enforcement measures by the Customs Department and the Directorate of Revenue Intelligence (DRI) to curb illegal imports, the steep increase in import duty has created a strong economic incentive for smuggling.

The higher import duties have widened the price gap between international and domestic markets, making illegal imports more profitable. As a result, jewellers and bullion traders are forced to bear higher raw material costs while facing unfair competition from smuggled gold and silver, he said.

The situation has also led to a decline in legal imports, adversely affecting government revenue, he added. The association pointed out that history has repeatedly shown that excessively high import duties encourage smuggling rather than reduce demand. It argued that a balanced and practical import duty policy would increase legal imports, improve tax collections, discourage smuggling and promote a healthier and more transparent bullion and jewellery market.

KGSMA has called on the Centre to rationalise import duties at a reasonable level to protect legitimate businesses and strengthen compliance in the sector.

Source: https://www.thehindubusinessline.com/