The Indian government has raised the import duties on gold and silver to 15% from the previous 6% rate to alleviate record-high overseas purchasing.

The move came after Indian Prime Minister Narendra Modi implored citizens to defer nonessential gold purchases for a year voluntarily, with the objective of curbing the country’s rising gold-import bill, which reached an all-time high of $71.98 billion last year, the Gem and Jewellery Export Promotion Council (GJEPC) said Wednesday.

“The measure is aimed at moderating imports of precious metals, conserving foreign-exchange reserves, reducing pressure on the current account deficit, and supporting overall macroeconomic stability,” the organization explained.

The changes, which come into effect immediately, also include platinum, which has a new tariff of 15.4%, compared with its previous 6.8%.

The GJEPC states that while it’s “committed to the spirit of ‘Nation First,’” it has written to Modi together with major retailers and manufacturers, outlining proactive measures the members will take to lower imports. Those include promoting sales of lower-karat gold jewelry, which will reduce imports by 20% to 30%, encouraging consumers to exchange old gold for new jewelry, and discouraging investment in gold bars, billets and coins, which account for 20% to 30% of total imports.

“The GJEPC’s consistent position is that hiking import duties rarely curbs gold imports — it merely inflates prices,” the GJEPC said. “Despite gold prices doubling recently, imports have not declined proportionally. Such measures often fuel smuggling and escalate export costs.”

The council pointed out that the most “severe” impact of the new policy would be on smaller and mid-size manufacturers, who are “the backbone” of the industry, and account for 80% of the GJEPC’s membership. These businesses are now facing a liquidity crunch.

“The GJEPC urges the government to engage in dialogue for sustainable solutions that align fiscal goals with export growth,” it added.