Centre asked to reduce import duty on gold

The Dollar Business Bureau If the sources have to be believed upon, the Indian Trade Ministry had sought a sharp cut on import duties on gold. To this regard, the Indian Ministry was quoted to have asked the Financial Minister to consider on reducing the import duty on gold from 10% to 2%, say the sources. The All India Gems and Jewellery Trade Federation, in its recommendations to the Union Budget 2015-16, had also asked the government to reduce the import duty on gold from 10% to around 2%, considering the expected decline of crude oil prices in 2015. Speaking on the current account deficit, the Minister was also quoted to have said that the account deficit is fairly under control and this would favour in the import duty cut on gold. We are hopeful that the import duty will be cut as current-account deficit is fairly under control now, added the official. According to a earlier report of Gold and Jewellery Export Promotion Council, Haresh Soni, Chairman, GJF, said that the government must also ensure that the difference between the import duty between the raw materials such as gold and silver and finished jewellery must be maintained at least 10% for gold and 15% for silver. GJF had also urged the Indian government to provide incentives in the jewellery manufacturing sector and reintroduce metal gold loans (MGL) with lower interest rates to promote manufacturing in the sector in India. The duty cut on the gold imports is expected to favour jewellery industry on a larger scale. Going by the earlier reports, the Government of India’s move to withdraw some of the restrictions placed on the import of gold is expected to provide a fillip to the Jewellery Industry which has been recording lower than expected volumes in the last few months, as per a report by research firm ICRA. India is the world’s largest importer of gold, accounting for around 20% of global gold imports and around 6% of India’s overall imports. India’s gold imports during April – October 2014 stood at around $18.8 billion, according to the Ministry of Commerce, India.  

This article was published on February 9, 2015.