One-kilo gold bars under U.S. tariff: Is your festive gold shopping about to get pricier?

India’s vast gold market is bracing for more turbulence after the U.S. reportedly reclassified one-kilo and 100-ounce gold bars under a tariff-hit customs code — a move that threatens to choke a critical link in the global bullion supply chain.

According to a Financial Times report, the U.S. Customs and Border Protection agency, in a ruling letter dated July 31, declared that these bars fall under code 7108.13.5500, making them subject to tariffs, a reversal from previous expectations. 

The clarification is a blow to Switzerland, the world’s largest gold refining hub, and could indirectly squeeze Indian buyers, who rely heavily on Swiss-processed gold.

Switzerland exported $61.5 billion worth of gold to the U.S. in the 12 months ending June. That same volume is now subject to 39% in tariffs, translating to roughly $24 billion in new duties. The shift followed a broader deterioration in Washington-Bern ties and caps months of legal uncertainty faced by Swiss refiners.

Most of India’s imported gold originates from Switzerland, with refineries there converting large London-style 400-ounce bars into kilo bars — the preferred size for trade in markets like New York and Mumbai. The new U.S. tariffs don’t directly hit gold exports to India, but the collateral impact is significant. With American tariffs making Swiss gold costlier and riskier to ship, Swiss refineries have begun halting or reducing shipments to various destinations, including India.

Refineries quoted in the report said they are holding back exports due to the classification dispute. India, which already faces high domestic import duties, is now seeing added pressure from global price volatility. 

Gold prices have soared more than 27% in 2025 alone, with rates in India recently breaching ₹100,000 per 10 grams. The surge is fueled by fears over inflation, currency stability, and safe-haven demand amplified by U.S. trade moves.

For Indian buyers, this means tighter supplies ahead of the festive and wedding seasons. Jewelers are already reporting reduced demand or smaller-ticket purchases, while investors are shifting toward sovereign gold bonds and ETFs to avoid high physical premiums.