15 Aug 2022
DiamondWorld Directory
-
Home |
News
Home
Gold prices may rise on likely import duty hike
Is another round of import duty hike on gold on the government’s cards?
By: Sandhya Sutodia
|
May 14 2013 3:31PM
|
Reference: 7815  

DecreaseIncrease
Even when gold prices in the international market are expected to come down, prices in India may go up with the government mulling plans to increase the import duty further from the current six per cent, corporate insiders said.

The decision has not been taken as yet but it may be on the cards, sources said, adding that the government and the Reserve Bank of India (RBI) have initiated a raft of measures to check gold imports and give some breathing space to the ballooning current account deficit (CAD).

Country’s gold imports shot up 138 per cent in April as customers took advantage of lower prices, increasing pressure on the CAD and limiting the space for monetary easing even though inflation slowed down last month, reveals the data released.

The surge in gold buying sent the April trade deficit to $17.8 billion, up more than 72 per cent from March, data showed, because retail customers in India went on a buying spree after a sharp fall in global prices. In India gold prices corrected by around 30 per cent.

On Monday the government expressed concern over the rising CAD deficit due to the massive demand of gold and hinted some stricter rules.

C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, said April’s surge was an aberration and demand would be lower in 2013-14… we would have to be more careful on curbing imports through increasing duties further as it may lead to gold coming in through unofficial channels.”

“It clearly means that raising import duties alone will not restrict imports as it can also lead to smuggling of gold,” said an analyst.

“We don’t expect another hike and the government and the RBI have understood that this will lead to import of gold through illegal channel. Further increase in the import duty will encourage smuggling and the income generated from these activities might be used in various illegal activities,” said Bachhraj Bamalwa, former chairman, The Gem and Jewellery Trade Federation.

“The smuggling of gold was practically nil before this period but has increased ever since the import duty has been increased. Bamalwa said.

The rise in gold imports is surprising. It was not expected,” claimed commerce secretary SR Rao.

“Seeing the widening CAD, the government was shocked and increased the duty to six per cent in the month of January 2013 to stem a rising import bill,” said Namit Dave, a gold analyst.

Earlier last year, import duty was increased from one per cent to four per cent.

A city based jeweller on the condition of anonymity said on a one per cent hike in import duty, one kg of gold would be costlier by Rs 27,000-Rs 28,000 seeing the current market price. “If two per cent is increased we will be in trouble and sales will be down for some days,” he said.

Talking about the survival of the jewellers and women’s love for the yellow metal, Bablu Dey, director, Guinea Emporium, said the jeweller would weave in less grammage into the making to cater to growing demand.

On Monday, the Indian rupee which was ruling at around 55 against the US dollar appreciated to around 54.80 and on Tuesday it opened at Rs 54.65 in the morning hours.

Follow DiamondWorld on Instagram: @diamondworldnet
Follow DiamondWorld on Twitter: @diamondworldnet
Follow DiamondWorld on Facebook: @diamondworldnet
Have Your Say
* Your view
* Name:
* Email:
* Town/city:
* Country/State:
*  Company:
 
*  Name:
 
*  Mobile:
 
*  Email:
 
 
Subscribe for DiamondWorld weekly Newsletter
 
Advertisement
DWWeeklypost
Search News by City
Advertisement
DWsubscription
Recent Issue
2022
AVAILABLE NOW...!
News in Pictures
Videos
Young Diamantaires
Pictures: 16
Stunning Jewellery from Cannes 2019
Pictures: 24
Sparkly Jewels at Oscars 2019
Pictures: 19
Golden Globes 2018
Pictures: 15
Spotted: Who Wore What (December 2018)
Pictures: 4
India Diamond Week
Pictures: 8
Spotted: Who Wore What (October 2018)
Pictures: 7
Spotted: Who Wore What (September 2018)
Pictures: 6
70th Emmy Awards
Pictures: 11
35th India International Jewellery Show 2018
Pictures: 46
JJS - IJ Jewellers Choice Design Awards 2015 powered by GIA
Views: 31249
Diamond World Expert Hour with Evgeny Agureev, Deputy CEO, ALROSA
Views: 8550
GJEPC Chairman Interview
Views: 27441
IJ Jewellers Choice Design Awards 2012 - Part 1
Views: 38225
Promo for IJ Awards 2012 at NDTV Profit
Views: 55995
IJ Jewellers Choice Design Awards 2012- Part 2
Views: 67549
Couture India 2016 - A Business Boutique Show by IJ Magazine
Views: 21308
Savjibhai Dholakiya, Surat Businessman (Diamond Merchant) speaks in Vibrant 2015
Views: 49929
IJ Jewellers Choice Design Awards 2013 - NDTV Video
Views: 51688
Member of:
Supporter of: