The government on Friday proposed to increase import duty on precious metals, including gold, silver and platinum, a move which will make them expensive in the domestic market. Finance Minister Nirmala Sitharaman said in her Budget speech that “it is proposed to increase custom duty on gold and other precious metals from 10% to 12.5%.”
The similar hike was proposed for silver (including silver plated with gold and platinum); base metal clad with silver; platinum; and waste and scrap or precious metals. Currently, these metals also attract 10% import duty.
Now, with the hike in duty, jewellery or other items made out of these precious metals will become expensive. The decision to raise import duty on gold came at a time when the domestic jewellery industry was demanding a cut in the same. The Commerce Ministry, too, had in the past recommended a reduction in the duty.
The country’s gold imports dipped about 3% in value terms to $32.8 billion during 2018-19. The dip in the imports is expected to keep a lid on the current account deficit.
Total imports of the precious metal in 2017-18 stood at $33.7 billion as against $27.5 billion in 2016-17 and $31.8 billion in 2015-16. In volume terms, India imported 982 tonnes of the yellow metal in the previous financial year.
India is one of the largest gold importers in the world and the imports mainly take care of demand from the jewellery sector. The All India Gem And Jewellery Domestic Council said the move was “disappointing and unfortunate”.
(With PTI inputs)