Govt considers cutting high gold import duty, ease export rules

  • Reuters, New Delhi
  • |
  • Updated: Jan 07, 2014 08:00 IST

Indian officials are in discussions to cut a record high import duty on gold and relax rules on exports, government sources said, after the measures helped narrow the country’s trade deficit and now threaten to encourage smuggling.

The government had imposed the curbs last year when overseas gold purchases — the country’s second most expensive import after oil — pushed its current account deficit to a record and undermined the rupee.

With three duty hikes last year to a record 10% and onerous restrictions tying purchases to exports, official arrivals shrank almost 90% in the six months to November, helping China displace India as the world’s top gold buyer.

The decision to cut the import duty is likely to be taken anytime this month, said one of the government sources, who has direct knowledge of the deliberations but did not want to be named.

 

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