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After gold, now a big and surprising news has come for silver buyers and traders. The Central Government has implemented new and very strict rules regarding the import of silver in the country. Taking a big step, the government has directly removed many important categories of silver from the ‘free list’ and put them in the ‘restricted’ category. What this means clearly is that now it will not be as easy to import silver from abroad as before and for this, additional approval and strict licenses will be required from the government.

After all, why did the government take this sudden decision?

There is a huge economic strategy hidden behind this sudden step taken by the Modi government. The main objective of the government is to control the ever increasing import of precious metals in the country and rapidly reduce the ‘trade deficit’. For quite some time, huge pressure was being seen on the import of both gold and silver in the country. Due to this, there was a constant worry about the adverse impact on India’s precious foreign exchange reserves, to handle which this big decision has been taken.

People were running towards silver instead of gold, the government sensed the move

Another big concern of the government has also come to light behind this ban. In fact, the government is fully aware that after increasing the import duty on gold, people are now increasingly turning to silver for investment and jewellery. Since silver was much cheaper than gold, people were buying it in large quantities considering it a safe option. Sensing this possibility and trend in time, the government has started taking strict action against unbridled import of silver ahead of time.

Let us remind you that recently, in another big blow, the government had directly increased the import duty on both gold and silver from 6 percent to a whopping 15 percent. Despite this, there was apprehension in the market that investors might increase their buying of silver by avoiding the high prices of gold.

Full emphasis on saving foreign exchange and strengthening the rupee.

At present, the entire focus of the government is on protecting its foreign exchange reserves and reducing the increasing pressure on the Indian rupee in the international market. In view of the ongoing global turmoil, war situations and ever-increasing import bill, the government is now in no mood to give any kind of relaxation and seems to be completely alert.

Major economic experts of the market also believe that if the import of precious metals like gold and silver in the country continues to increase at this pace, then both India’s current account deficit and trade deficit can reach dangerous levels. This is the reason why the government is now making every possible effort to keep the situation under control by keeping direct control on imports.

Imports reach lowest level in 30 years, chances of further recession

If we look at the government figures, another shocking thing comes to light. According to data, in the month of April itself, the import of gold and silver within the country has fallen to its lowest level in the last 30 years. The high import duty increased by the government and the skyrocketing prices of gold and silver in the international market are being considered as the biggest reasons behind this huge decline in imports. Now, after these new restrictions imposed by the government, it is clearly believed that there may be an even bigger decline in silver imports in the coming months, which may have a direct impact on the prices of silver in the domestic market.