Top News

New Delhi, May 13 (IANS) The government on Wednesday announced a hike in customs duties on gold and silver to 15 per cent from 6 per cent as policymakers move to contain pressure on India’s foreign exchange reserves and the external account amid the ongoing West Asia conflict.

Moreover, the revised duty on platinum imports has been raised to 15.4 per cent from 6.4 per cent.

According to official changes, the revised structure imposes a 10 per cent basic customs duty along with a 5 per cent Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports, taking the effective import tax to 15 per cent.

The move comes as India’s import bill remains elevated, with precious metals among the key contributors to higher foreign exchange outflows.

The duty hike is expected to discourage inbound shipments and support macroeconomic stability.

Earlier in the month, Prime Minister Narendra Modi urged citizens to avoid non-essential gold purchases for a year and adopt austerity measures to conserve foreign exchange reserves amid global uncertainty linked to the West Asia crisis.

India is among the world’s largest consumers of gold, with demand driven largely by jewellery, investment and festival-related purchases.

Meanwhile, inflows into gold exchange-traded funds (ETFs) surged in April, reflecting continued investor interest in the yellow metal despite higher import costs.

According to data from the Association of Mutual Funds in India (AMFI), gold ETF inflows jumped 34 per cent month-on-month to Rs 3,040 crore in April, compared with Rs 2,265 crore in March.

However, silver ETFs continued to witness sustained outflows, marking the third consecutive month of withdrawals.

AMFI data showed silver ETFs recorded an outflow of Rs 126 crore in April, following outflows of Rs 683 crore in March and Rs 826 crore in February.

--IANS

ag/