Centre Increases Gold Import Duty, Gold and Silver to Become Costlier
Gold and Silver Prices Likely to Rise as Govt Hikes Import Duty to 15%: The Central Government has increased the import duty on gold and silver from 6 percent to 15 percent, making precious metals costlier in the domestic market. The decision has been taken to reduce pressure on the country’s foreign exchange reserves and control the rising import bill. India, being the world’s second-largest gold consumer, depends heavily on imports to meet domestic demand.
According to reports, the government has imposed a 10 percent Basic Customs Duty (BCD) along with a 5 percent Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports. Officials believe the move will help reduce the Current Account Deficit (CAD) and support the Indian rupee amid global economic uncertainty and tensions in West Asia. Prime Minister Narendra Modi has also appealed to citizens to avoid purchasing gold for at least a year to ease pressure on the economy.
However, market experts and bullion traders fear the sharp increase in import duty could lead to a rise in illegal gold smuggling. Traders say smugglers may try to take advantage of the higher price gap created by the new tax structure. Gold imports had already fallen sharply in recent months, and with the new duty hike, prices of gold and silver jewellery in the domestic market are expected to rise further.
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