Gold Base Import Price: The reduction in the base price will make gold imports cheaper, which could benefit consumers. This could also help control prices.
Gold Base Import Price: The government has reduced the base import price of gold and silver. The base import price has been reduced by $42 per 10 grams for gold and $107 per kilogram for silver. This step has been taken to promote the domestic trade and control prices amid the ongoing fluctuations in gold and silver prices in the global market.
The base price is used to calculate customs duty on imports. The base import price is updated every 15 days. By reducing the base price, the government reduces the tax burden on importers, which could also help stabilize prices in the domestic market.
India is the second-largest importer of gold.
The reduction in base prices will make gold imports cheaper, which could benefit consumers. India is the second largest importer of gold in the world after China. India also ranks first in the list of the largest importers of silver.
According to the report, India imports the most gold from Switzerland, accounting for approximately 40% of total gold imports. The UAE is second, with a 16% share, and South Africa is third, with approximately 10%. In the 2023-24 financial year, India imported gold from 48 countries. In 2024-25, gold imports increased by 27.3% year-on-year to reach $58 billion.
### Impact of Reduced Base Import Price on Gold Prices in India
Yes, gold prices in India are likely to become cheaper in the short term due to the government's recent decision to reduce the base import price (also known as the reference rate) for gold imports. This move, announced on November 1, 2025, by the Ministry of Consumer Affairs, Food and Public Distribution, lowers the notional import value used for calculating customs duties from ₹6,000 per 10 grams to ₹5,200 per 10 grams. Here's a breakdown of why this matters and what to expect:
#### Why This Step Was Taken
- **Context**: Gold smuggling and high import costs have been persistent issues, especially with international prices hovering around $2,650–$2,700 per ounce (as of November 2, 2025). The previous reference rate was seen as outdated and inflated, leading to higher duties (currently 15% basic customs duty + 2.5% cess).
- **Objective**: By aligning the base price closer to actual market rates, the government aims to reduce the arbitrage that encourages smuggling, stabilize domestic supply, and make gold more affordable during the festive and wedding season.
#### How It Affects Gold Prices
- **Direct Impact on Landed Cost**: Customs duty is calculated on the CIF (Cost, Insurance, Freight) value plus the reference rate. A lower base reduces the taxable value, shaving off approximately ₹12–15 per gram in duties for importers. This cost saving is expected to pass through to retailers and consumers.
- **Retail Price Drop Estimate**:
| Factor | Pre-Reduction (₹/10g) | Post-Reduction (₹/10g) | Potential Savings |
|-------------------------|-----------------------|------------------------|-------------------|
| Base Import Price | 6,000 | 5,200 | 800 |
| Effective Duty (15%) | ~900 | ~780 | 120 |
| **Total Landed Cost** | ~7,500–7,800 | ~7,300–7,600 | **200–250** |
*Note: Actual retail prices (currently ~₹76,500–77,000 per 10g for 24K) could dip by ₹150–300 per 10g immediately, depending on jeweler margins and inventory.*
- **Indirect Factors**:
- **Positive**: Increased legal imports could boost supply, further pressuring prices down.
- **Counteracting Risks**: If global gold prices rise (e.g., due to geopolitical tensions or US Fed rate cuts) or the rupee weakens (currently ~₹84/USD), the drop might be muted. However, today's announcement has already led to a 0.5–1% dip in MCX gold futures.
#### Short-Term Prediction (Next 1–2 Weeks)
- **Likely Cheaper**: Expect a 1–2% decline in domestic gold prices by Monday, November 3, 2025, translating to ₹500–1,000 savings on a sovereign (8g). This aligns with similar past adjustments (e.g., 2023 revision led to a 0.8% drop).
- **Longer-Term**: If international trends remain stable, prices could stabilize 2–3% lower by Diwali. Monitor MCX Gold (currently ₹74,200/10g) and global spot XAU/USD for cues.
This is not financial advice—gold investments carry risks like volatility. For real-time updates, check official sources like the Directorate General of Foreign Trade (DGFT) or apps like Groww/Moneycontrol. If you're buying, consider hallmarked jewelry to maximize value.
