A World Gold Council report indicates that unofficial gold imports into India reached their highest level since 2023 during the third quarter of 2026, as higher import duties encouraged traders to use informal supply channels.
Highlights
- India’s illegal gold imports reportedly reached their highest level since 2023.
- The surge was recorded during July–September 2026.
- Higher government import duties reportedly encouraged unofficial gold trade.
- The World Gold Council highlighted the growing use of informal supply channels.
- Unofficial imports can undermine legitimate gold businesses and government revenue.
- India’s gold market remains highly sensitive to import duties and international prices.
India’s Illegal Gold Imports Jump Over 1,500% to 50 Tonnes in Q3 as Higher Import Duty Fuels Smuggling
New Delhi, November 3: India’s unofficial gold imports surged more than 1,500% during the July–September quarter of 2026, reaching their highest level since 2023, according to the World Gold Council (WGC). The sharp increase followed the government’s decision to raise gold import duties, making unofficial trading channels more attractive.
According to the WGC’s latest Gold Demand Trends report, unofficial gold inflows jumped to approximately 50 metric tonnes in the third quarter, compared with just 3 tonnes during the corresponding period last year. The estimates are based on data from consultancy Metals Focus. World Gold Council +1
Import Duty Hike Fuels Unofficial Gold Trade
The government increased gold import duty from 6% to 15% in May 2026 as part of measures to curb imports and ease pressure on India’s trade deficit.
However, the higher levy widened the cost difference between legally imported gold and supplies entering through unofficial channels.
Such channels may include smuggling networks and undeclared quantities carried by individuals, allowing traders to avoid paying applicable customs duties.
The WGC noted that previous increases in import duties have also encouraged unofficial gold inflows. World Gold Council +1
Official Gold Imports Fall 70%
While unofficial imports increased, official bullion imports, including doré, declined 70% year-on-year to 64 tonnes during the September quarter.
India’s total gold supply fell 43% to approximately 136 tonnes, reflecting weaker official imports and limited recycling activity.
The growing presence of unofficial gold supplies also creates challenges for legitimate bullion dealers and jewellers, who must compete with traders operating outside formal tax and customs systems. World Gold Council +1
Gold Demand Declines Despite Rising Prices
The report also highlighted a significant slowdown in India’s overall gold consumption.
Total gold demand declined 29% year-on-year to approximately 162.5 tonnes during the third quarter, compared with 229.8 tonnes a year earlier.
Jewellery demand fell 20%, while bar and coin investment demand dropped 40% from the previous year’s exceptionally high level.
Despite weaker consumption volumes, the value of overall gold demand increased 3% to approximately ₹2.42 lakh crore, reflecting elevated prices.
Domestic gold prices averaged ₹1,48,891 per 10 grams during the quarter, around 45% higher than a year earlier. World Gold Council +1
Festive Season Could Support Gold Purchases
Looking ahead, the World Gold Council expects seasonal buying during Diwali and the wedding season to support gold demand in the December quarter.
However, elevated prices and affordability concerns could continue to restrict jewellery purchases.
The latest findings highlight a growing challenge for India’s bullion market, where higher import duties have coincided with declining official shipments and a sharp rise in estimated unofficial gold inflows.
