New Delhi, May 13 -- The Indian government has raised import duties on gold and silver to 15% from 6%, as part of a strategy to limit foreign purchases and relieve pressure on foreign exchange reserves.

This increase-comprising a 10% basic customs duty and a 5% Agricultural Infrastructure and Development Cess (AIDC)-is likely to dampen demand in the second-largest market for precious metals globally. Simultaneously, it could help reduce the trade deficit and support the rupee - one of Asia's weakest-performing currencies.

Nevertheless, industry experts warn that elevated duties might lead to a rise in smuggling, a trend that had diminished following tariff reductions in mid-2024, according to reports.

On Sunday, Prime Minister Narendra...