- India’s Ministry of Finance raised import taxes on precious metals to roughly 15%.
- Prime Minister Narendra Modi asked Indians to cut back on fuel via various means.
- India imports over 85% of its crude oil, making it the world’s third-largest oil importer.
India appears to be playing it safe as global energy prices stay volatile, with the government rolling out steps to ease import strain and protect its currency reserves.
On May 12, India’s Ministry of Finance raised import taxes on gold, silver, platinum, and similar precious metals to 10%, up from around 5%. When combined with the Agriculture Infrastructure and Development Cess (AIDC), the total tax climbs to about 15%, effective on May 13.
This is largely seen as a way to cut precious metal imports, which is a big driver of India’s trade deficit.
At the same time, Prime Minister Narendra Modi asked Indians to cut back on fuel while global energy markets stay under pressure. He encouraged businesses to bring back work‑from‑home and move meetings online to save on petrol and diesel.
The Prime Minister also asked people to skip non‑essential foreign trips and put off buying gold for a year to help protect the country’s foreign exchange reserves. Households were also asked to use less cooking oil as part of a bigger push to reduce imports and take pressure off the economy.
Even though some of these suggestions haven’t shown up in official policy yet, they highlight the fact that India is exposed to outside shocks from products like oil. The country imports over 85% of its crude oil, making it the world’s third-largest oil importer, so any spike in global prices or shipping disruptions hits India hard.
Energy Markets Remain Under Strain
Energy markets have been on edge through most of 2026, primarily due to the ongoing Middle East turmoil. Additionally, uncertainty surrounding OPEC+ production and ongoing disruptions along big shipping routes have all added to the energy market instability.
Brent crude prices have swung wildly in recent months, putting extra pressure on big‑importing countries such as India.
Recent economic data also show India’s trade deficit grew earlier this year, partly because of rising imports of energy and gold. For instance, India’s total trade deficit expanded to 119.3 billion in the fiscal year that ended in March 2026, compared to 94.6 billion the year before.
Related: India Expands e-Rupee Use in Welfare as BRICS Talks Intensify
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