The government 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 per cent to 12.5 per cent”.
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 per cent import duty.
Now with hike in the 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 past recommended for reduction in the duty.
The country’s gold imports dipped about 3 per cent in value terms to USD 32.8 billion during 2018-19. Dip in the imports expected to keep a lid on the current account deficit.
Total imports of the precious metal in 2017-18 stood at USD 33.7 billion as against USD 27.5 billion in 2016-17 and USD 31.8 billion in 2015-16.
In volume terms, India imported 982 tonnes of the yellow metal in the previous financial year.
The imports in 2017-18, 2016-17 and 2015-16 were 955 tonnes, 778 tonnes and 968 tonnes, respectively.
India is one of the largest gold importers in the world, and the imports mainly take care of demand from the jewellery sector. Gems and jewellery exports declined 5.32 per cent to USD 30.96 billion in 2018-19.