India Rules Out Higher Customs Duty on Gold Imports

SEATTLE (Scrap Monster): The Indian government has ruled out possibilities of lifting import duty on gold to arrest the fall of local currency and check the ever-widening current account deficit (CAD) situation.

According to Commerce Ministry spokesperson, who wished to remain unidentified, the country currently doesn’t have any plan to raise the tax on gold imports, as it may trigger illegal shipments into the country, ahead of the upcoming festive season. At the same time, it may increase import duties on precious stones, certain types of steel products and electronic items, in order to curb redirected imports of these products into the country on account of the ongoing tariff trade war between the U.S. and China.

The announcement comes as a sigh of relief to jewelers in the country, who had warned that any hike in tax on gold imports would hit demand during the ongoing wedding and festival season. It must be noted that the country had increased gold tax three times in 2013, to curtail demand and contain CAD that pushed the rupee to lower levels.

Meantime, sources indicate that the finance ministry plans to introduce a gold deposit program aimed at attracting tons of gold lying with Indian households. Also, the inter-ministerial group, during its meeting last week, had discussed measures to mobilize gold from temple vaults into the proposed gold deposit scheme. The gold thus collected would be recycled within the country, which in turn will be supplied to gems and jewellery industry.