India, the world's second-largest gold consumer, has increased import duties on gold and silver to 15% from 6%.
The decision follows Prime Minister Narendra Modi's recent call for citizens to reduce bullion purchases for a year, as the country seeks to curb outflows of foreign currency.
2%, it underscores the need for fiscal caution in managing external accounts.
The policy shift is expected to impact demand for the precious metals, which have been a significant drain on India's forex reserves.
Analysts suggest the move could help stabilize the rupee, which has been under pressure amid broader economic challenges.
The government's focus on foreign exchange conservation comes as India's consumer price inflation rose to 3.48% in April, marking the sixth consecutive month of increases.
While the figure was below economists' forecasts of 4.2%, it underscores the need for fiscal caution in managing external accounts.