Video: Planning to Buy Gold? Govt’s New 15% Import Duty may Burn your Pocket
Centre Gorvernment on Wednesday announced a sharp hike in import duties on gold and silver, raising them from 6% to 15% in an effort to curb soaring imports and protect India’s foreign exchange reserves.
New Delhi: The Centre on Wednesday increased import duties on gold and silver from 6% to 15% in a major step aimed at controlling the surge in precious metal imports and protecting India’s foreign exchange reserves amid rising tensions in West Asia.
According to a notification issued by the finance ministry, the government revised the Social Welfare Surcharge (SWS) and Agriculture Infrastructure and Development Cess (AIDC), taking the effective customs duty on gold and silver to 15% from May 13. Import duty on platinum has also been raised sharply from 6.4% to 15.4%.
The government has also revised duties on related items such as gold and silver dore, jewellery findings and precious metal coins.
The decision comes at a time when India is facing pressure on its forex reserves due to increasing global uncertainty, rising crude oil prices and instability in the Middle East region. Officials believe higher import duties could discourage excessive imports of precious metals, which significantly impact the country’s import bill.
Just days before the announcement, Prime Minister Narendra Modi had appealed to citizens to avoid unnecessary spending on imported goods. During his address on Sunday, the Prime Minister urged people to postpone gold purchases, reduce foreign travel and use fuel carefully to help conserve foreign exchange reserves during the ongoing geopolitical crisis.
Experts say the sharp increase in import duty may lead to a rise in domestic gold and silver prices in the coming days. Jewellers and bullion traders are also expecting reduced demand, especially during the wedding and festive season. However, the government appears focused on stabilising the economy and limiting pressure on the rupee.
India is one of the world’s largest importers of gold, and any increase in imports directly affects the current account deficit and forex reserves. The latest move signals that the government is prioritising economic stability as uncertainty continues in global markets due to the West Asia situation.
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