Government increases import duty on gold to 12.5% from 7.5%
In a notification earlier, the Indian government announced that it has increased import duty on gold to 12.5% from 7.5%. This comes in the wake of high trade and current account deficits and in order to curb import of gold.
“Earlier, we had requested the government to decrease import duty on gold to avoid smuggling and they listened to our concern and enforced the same. Now they have again increased duty on gold. As an industry we are not happy and we will again represent our concerns to the authorities,” says K.Srinivasan, Convenor, Gold Jewellery & Precious Metals, GJEPC.
In May, the country’s trade deficit increased to $24.29 billion and India imported gold worth $6.03 billion in the same month to meet the growing gold consumption post lock down. This has been the highest gold import in over a decade.
Doing away with import duty on gold or reducing the same will definitely help in strengthening the domestic market.