Government Raises Gold, Silver Import Duty to 15% to Control Imports and Support Rupee
In a significant policy move, the Indian government has increased import duties on gold and silver to 15% from the earlier 6%, aiming to reduce precious metal imports and ease pressure on the country’s foreign exchange reserves. The decision comes amid growing concerns over India’s rising trade deficit and weakening rupee, as heavy bullion imports have added strain to external finances. Analysts believe the higher tariffs could discourage fresh demand in one of the world’s largest gold-consuming markets. The announcement follows Prime Minister Narendra Modi’s recent appeal urging citizens to postpone non-essential gold purchases for a year in the national interest. He had cited global economic uncertainty and tensions in the Middle East as reasons to conserve foreign exchange reserves. According to trade estimates, India’s gold imports have surged sharply in recent years, with increasing shipments from the UAE. Policy experts have also called for a review of tariff concessions under the India-UAE trade agreement, which they say contributed to higher imports. Union Minister Ashwini Vaishnaw also supported the move, stressing the need to reduce import-driven spending as geopolitical instability continues to impact global markets and energy routes through the Strait of Hormuz. The tariff hike has triggered mixed reactions. While some see it as a necessary step to protect the rupee and improve the trade balance, others fear it may encourage smuggling, disrupt wedding-season buying, and increase costs for consumers. Source: TOI
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