India’s decision to increase import duties on gold and silver to 15% pushed bullion prices sharply higher, but Zerodha co-founder Nithin Kamath said the more striking development was what did not happen before the announcement. Kamath explained that there were no sudden spikes in trading activity in a post on X, prices or open interest in gold and silver contracts ahead of the government’s late-night policy move.

“The news about import duties on gold and silver going up to 15% came late last night. The interesting thing is neither open interest, prices, nor volume in Gold and Silver showed any unusual moves in the hours leading up to the announcement,” he wrote.

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Duty hike reverses part of earlier relief

The Centre raised the effective import duty on gold and silver to 15%, rolling back a portion of the cuts introduced in 2024. This comes amid concerns over growing bullion imports, pressure on the current account deficit and continued weakness in the rupee. After the announcement, gold and silver prices on MCX climbed sharply as markets reopened, showing the immediate impact of the higher duties.

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Kamath draws contrast with global markets

Kamath said the absence of unusual positioning before such a major announcement suggested stronger controls within Indian markets. According to him, sensitive policy decisions in several Western economies are often followed by allegations of insider trading or leaks benefiting well-connected traders.

He argued that if a similar duty revision had taken place in the United States, some market participants with access to privileged information may have attempted to benefit through futures, derivatives or prediction-based platforms.

“If this had happened in the United States, I’m fairly sure some of the people close to the decision-making process would have found a way to trade it, either through regulated futures markets, other derivative contracts, or prediction markets like Polymarket and Kalshi,” Kamath explained on X.

References to crude oil and geopolitical trading allegations

Zerodha co-founder also pointed to earlier allegations linked to crude oil trading and geopolitical developments, including during the Iran conflict. He said global discussions had repeatedly questioned whether politically connected individuals gained from advance access to market-sensitive information.

Without identifying any specific individuals or organisations, Kamath said the use of privileged information for financial gain appeared to be increasingly accepted in some parts of the world. “It’s kind of insane how casually people in power seem to monetize privileged information. At some point, this stops looking like ‘market participation’ and starts looking like blatant insider trading with better branding,” he wrote on X.

‘Indian markets more tightly controlled’

Kamath added that despite criticism surrounding retail speculation and rising derivatives activity in India, the country’s financial markets still appear to maintain stricter oversight in these “grey zone” areas than many developed economies.

According to him, the absence of unusual trading activity before the gold and silver duty hike reinforced that view. “Just another reason why Indian markets, despite all their flaws, are far more tightly controlled in these grey zones than many Western markets,” he added.

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