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India has raised its basic import duty on gold to 15 per cent from 10.75 per cent, the government said in a notification on Friday, as the world’s second-biggest consumer of the precious metal tries to dampen its demand.
India fulfills most of its gold demand through imports, which were putting pressure on the rupee which hit a record low earlier this week.
A recent report said, the central government has become vigilant as the trade deficit in May hit a record high of $24.3 billion. The Centre is closely scrutinising imports, especially gold, amid concerns over rising in the current account deficit (CAD). The imports of gold in May rose by almost nine times to $7.7 billion compared to a year ago.
Last year, the government had cut the tax to 7.5 per cent in the Union Budget. Gold also attracts 3 per cent Goods and Services Tax (GST) in India.
On the Multi Commodity Exchange (MCX), gold rates on Friday surged nearly 3 per cent to Rs 51,900 per 10 gram. However, gold prices were lower today in global markets.
This hike in import duty comes as a report by the World Gold Council (WGC) said that India is the fourth-largest nation in terms of gold recycling country in 2021 as it recycled 75 tons, or 6.5 per cent of the total gold recycled across the globe.
(With inputs from agencies)
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