The higher duties could lower the demand in India, which is the world’s second-largest consumer of precious metals. (File photo)
The government has hiked import tariffs on gold and silver to 15% from 6% in an effort to cut down on overseas purchases of the metals and ease pressure on the country’s foreign exchange reserves, news agency Reuters reported.
The higher duties could lower the demand in India, which is the world’s second-largest consumer of precious metals, and help curb India’s trade deficit while supporting the rupee.
The move comes after Prime Minister Narendra Modi’s austerity call amid West Asia crisis, urging citizens to avoid buying gold and curb fuel consumption. The PM has also asked the government and private offices to revert to ‘Covid-era’ habits such as work-from-home and virtual meetings, and asked citizens to opt for car pooling and reduce fuel consumption.
However, industry officials expressed concerns that higher import duties could revive smuggling, which had eased after mid-2024 tariff cuts.
On Tuesday, the rupee hit an all-time low of 95.75 per dollar before closing at 95.63.
Chief Economic Advisor (CEA) V Anantha Nageswaran, while warning that ongoing structural shifts in the global economic order were not going to reverse, said that stopping the rupee from falling further was one of the “central macroeconomic imperatives” of the current fiscal.
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