India raised the import tax on gold and silver Tuesday, which will likely increase local prices and depress demand in the world's largest consumer of the two precious metals.

The finance ministry said in a statement that gold imports will now be taxed at 2% of value from a flat rate of 300 rupees ($5.83) per 10 grams previously and silver imports at 6% from the earlier flat rate of 1,500 rupees a kilogram.