Metal Stocks Surge as India Increases Import Duty on Gold, Silver, and Other Metals

Metal Stocks Surge as Government Raises Import Duties on Gold, Silver

On Wednesday, May 13, 2026, metal stocks experienced a sharp surge, tracking a significant rise in gold, silver, and other base metals. The shares of Hindustan Zinc, Vedanta, Hindustan Copper, NALCO, and other metal counters rallied substantially during the session as the jump in commodity prices weighed on the sector.

The rise in metal stock prices comes on the heels of the government's decision to raise import duties on several categories of gold, silver, and other precious metal imports to 15% from 6%. This move is aimed at curbing excessive imports of precious metals and reducing pressure on India's foreign exchange reserves amid rising global uncertainties.

Nifty Metal Soared 1.3%

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The Nifty Metal index soared 1.3% with all its constituents in the green. Hindustan Zinc was the top gainer, surging almost 5%, followed by Hindustan Copper, which added over 3%. Meanwhile, Vedanta, National Aluminium Company, and Hindalco gained over 1.5% each.

The buying in precious metals intensified, and gold and silver prices hit 6% upper circuit each. The MCX gold rate was up by ₹9,206, or 6%, at ₹1,62,648 per 10 gram, while the MCX silver price spiked by ₹16,743, or 6%, to ₹2,95,805 per kg.

Government's Decision to Impose Higher Duties

In a major move to curb gold buying and support the rupee, the government has revised the import duty structure on precious metals by imposing a 10% basic customs duty along with a 5% Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports, taking the total effective levy to 15%. The higher duties, which came into effect from May 13, 2026, are aimed at discouraging excessive imports of precious metals and reducing pressure on India's foreign exchange reserves amid rising global uncertainties.

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The revised tax structure applies not only to gold and silver but also to platinum, jewellery findings, and industrial imports linked to precious metals. The government has also raised import duties on gold imported from the United Arab Emirates under the fixed-quantity quota mechanism, which previously attracted concessional rates.

Impact on Silver Mining Companies

The rise in silver prices has also brought attention to companies linked to silver production. Mining firms with exposure to silver may benefit if the ongoing rally in the metal sustains, as higher silver prices can significantly improve profitability when production costs remain relatively stable.

India's Dependence on Gold Imports

India's rising dependence on gold imports has increasingly become a concern for policymakers. Gold imports surged more than 24% to a record USD 71.98 billion in 2025-26, compared with $58 billion in the previous financial year. Imports had stood at $45.54 billion in 2023-24 and $35 billion in 2022-23, highlighting the sharp increase in bullion demand over the past few years.

India remains the world's second-largest gold consumer after China, with demand largely driven by the jewellery industry and household investments. Gold is widely viewed as a safe-haven asset during periods of uncertainty, which often leads to a surge in purchases when geopolitical or economic risks rise.

However, higher bullion imports have also widened pressure on India's trade deficit and foreign exchange reserves, with gold accounting for more than 9% of the country's total imports.