Effects Of Increase In Gold Prices

In the latest Union Budget, Finance Minister, Nirmala Sitaraman, proposed to increase the import duty on gold from 10% to 12.5%.

- Aritra Mitra

The decision came at a time when the domestic jewellery industry was demanding a cut in import duty. In the past, the Indian commerce ministry had also recommended a reduction in import duty of jewellery. India is one of the largest importers of gold in the world. These imports mainly take care of the demand from the Indian jewellery sector. Total import of gold in 2015-16 had stood at $31.8 billion and it rose to $33.7 billion in 2017-18. It again dipped by 3% to reach $32.8 billion during 2018-19.

Plan behind the policy

Annargha Uuttiya Chowdhury, Director, Anjali Jewellers informed BE, “The government’s endeavour to reduce import of gold in order to stop out flow of foreign currency is understandable. However, the government must realise that the jewellery industry is a self-dependent industry and is in line with the Prime Minister’s ‘Make in India’ vision.”