Strong rise in metal shares
There was a strong rise in metal stocks on Wednesday, May 13 after the government increased the import duty on gold, silver and other metals. Due to rising metal prices, investor confidence strengthened and there was good buying in stocks like Hindustan Zinc, Vedanta, Hindustan Copper and National Aluminum Company. The government has increased the duty on import of gold, silver and other precious metals from 6% to 15%. After this, there was a bullish atmosphere in the metal sector.
Great rise in metal shares
Nifty Metal Index rose by about 1.3% and all its shares were seen trading in the green. Hindustan Zinc was the biggest gainer with a rise of about 5%. Whereas Hindustan Copper rose by more than 3%. Apart from this, shares of Vedanta, National Aluminum Company and Hindalco Industries also rose by more than 1.5%.
Upper circuit in gold and silver
Buying in precious metals was so intense that both gold and silver reached upper circuit of 6%. On MCX, gold rose by ₹9,206 to ₹1,62,648 per 10 grams. Whereas silver jumped by ₹ 16,743 to ₹ 2,95,805 per kg.
Why did the government increase the duty?
The government has taken this big decision to strengthen the rupee and curb the huge purchase of gold. Now 10% basic custom duty and 5% Agriculture Infrastructure and Development Cess (AIDC) will be imposed on the import of gold and silver. That means the total tax has become 15%.
The new duty has come into effect from 13 May 2026. Its objective is to reduce the import of precious metals and reduce the increasing pressure on the country's foreign exchange reserves.
Jewelery market may be affected
The new tax system will be applicable not only on gold and silver but also on industrial imports related to platinum, jewelery parts and precious metals. Now higher duty will be imposed on gold coming from UAE under the fixed quota. Experts believe that this may increase the domestic prices of gold and silver further. Also, due to expensive prices, the demand for jewelery may weaken for some time. However, this may encourage exchange and recycling of old jewellery.
Impact of West Asia tension also
This step of the government has come at a time when tension is continuously increasing in West Asia. Prime Minister Narendra Modi has also appealed to people to avoid unnecessary gold purchases and foreign trips. India is the second largest gold consumer country in the world. The country's gold import increased by 24% to a record $71.98 billion in 2025-26, due to which there is increased pressure on trade deficit and foreign exchange reserves.
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