Lagatar24 Desk
Days after Prime Minister Narendra Modi appealed to citizens to avoid buying gold for a year, the central government has taken a major policy step, raising the import duty on gold and silver from 6 percent to 15 percent with effect from May 13.
What Has Changed
The Finance Ministry has revised the duty structure by increasing the Basic Customs Duty on gold from 5 percent to 10 percent, and the Agriculture Infrastructure and Development Cess from 1 percent to 5 percent, bringing the total import tax on gold to 15 percent. The new rates came into force today.
Reversal of 2024 Budget Decision
In the July 2024 budget, the government had reduced gold import duty from 15 percent to 6 percent, which had made gold cheaper and led to a sharp rise in imports. The latest hike effectively reverses that decision and brings duty back close to the earlier level.
Why the Government Acted
The government believes that high gold imports put pressure on foreign exchange reserves and widen the trade deficit. The duty hike is aimed at curbing imports and reducing dependence on foreign gold.
Impact on Consumers and Traders
The hike is expected to make gold significantly more expensive in India, adding to the financial burden of consumers, particularly during the ongoing wedding season. Bullion traders fear that rising prices could dampen demand and hurt their sales.
