Govt raises import duty on gold to 8%
The government on Wednesday raised the import duty on gold by two percentage points to 8% to discourage imports by the pushing the precious metals' landed price.business Updated: Jun 06, 2013 00:45 IST
The government on Wednesday raised the import duty on gold by two percentage points to 8% to discourage imports by the pushing the precious metals' landed price.
“Import duty on gold has been raised from 6% to 8%,” an official said. This is the second increase in import duty of gold in the last six months as the country’s imports surged in May.
India imported around 162 tonnes of gold in May, much more than expected and making further measures from the government to curb demand.
Gold imports have shot up sharply as consumers likely brought forward their purchases in response to the recent sharp fall in gold price.
The move is aimed at stemming the dollar outflow, arresting the rupee’s fall that is inching towards record lows and rein in the current account deficit (CAD) — the difference between dollar outflows and inflows — that has reached a record 6.7% of GDP in December 2012.
A widening CAD is a worrying sign for a slowing economy where fulfilling immediate dollar payment obligations may necessitate dipping into the pool of foreign exchange reserves.