Indian Commerce Ministry Seeks Drastic Cut in Gold Import Duty

SEATTLE (Scrap Monster): The Ministry of Commerce in India has submitted its proposals to the Finance Ministry, ahead of the upcoming Budget on 1^st February, 2020. As per news agency reports, the Ministry has sought significant reduction in import duty on gold in the forthcoming budget. It must be noted that the gems and jewellery exports industry has sought reduction of import duty from the current level of 12.5% to as low as 4%.

The gold imports by the country have been on a decline. This has helped in narrowing the current account deficit (CAD) significantly. As per government data, gold imports registered modest decline by around 7% during April-November ’19 to total $20.57 billion. The gold imports had totalled $22.16 billion in the corresponding period last fiscal.

The country’s trade deficit dropped to $106.84 billion during the initial eight-month period of the current fiscal, as compared to $133.74 billion in April to November in 2018, primarily on account of declining gold imports.

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The Commerce Ministry noted that reduction of gold import duty would boost manufacturing and exports of gems and jewellery.

It must be noted that, despite pleas to cut duty on gold imports, the Finance Ministry had raised the duty level from 10% to 12.5% in the last budget.

Incidentally, India is one of the largest importers of the yellow metal. Imported gold caters to much of the demand of the domestic jewellery industry in the country.