India Mulls Lowering of Gold Import Duty from 12.5%

SEATTLE (Scrap Monster): As part of government’s efforts to push gold jewellery exports, the Indian government is likely to cut gold import duty from 12.5%. Incidentally, the country is a major importer of gold and much of the imported gold is consumed by the domestic jewellery industry.

According to data published by the Gem and Jewellery Export promotion Council (GJEPC), the country’s gem and jewellery exports recorded marginal decline by 1.5% during the opening eight months (Apr’19 to Nov ’19) of the ongoing fiscal year. At the same time, gold imports by the country reported decline by approximately 3% in 2018-’19, in accordance with the data published by the Reserve Bank of India (RBI).

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The reduced gold imports have helped the country to keep its current account deficit (CAD) under control. The move to reduce duty on gold imports may boost imports, thus narrowing the CAD. However, sources close to government disclosed that the government is keen on boosting exports of Indian jewellery, which are in huge demand across the world.

Although sources hinted at a possible cut, they denied predicting whether there will be significant cut in import duty, as have been demanded by various gems and jewellery industry associations.

India imports approximately 800-900 tonnes of gold every year.