Indian Commerce Minister Calls for Gold-Import Duty Cut - HSBC

In an interview with the Press Trust of India, Commerce and Industry Minister of State, Nirmala Sitharaman, said the country’s gold import duty should be eased, HSBC says. The duty has not only impeded the gems and jewelry industry, but it has also led to a spike in illegal gold imports. “India’s appetite for gold may hinge on the performance of the country’s current account deficit.

The Indian government has often cited bullion as the primary cause for the country’s ballooning trade deficit,” HSBC says. The bank notes the current account deficit has narrowed according to the latest data, and the May election of Prime Minister Narendra Modi fanned hopes some these restrictions may be rolled back.

 “While there has been some effort to ease bullion restrictions, such as allowing more entities to import gold, the import duty remains at 10%. A further narrowing of the country’s current account deficit may be an important factor to unlocking India’s bullion appetite, in our view,” HSBC says.

Courtesy: Kitco News