The price of gold and silver in the country may rise to unimaginable heights. The government has suddenly decided to increase the import duty of gold and silver by 9 percent. Earlier, there was a 6 percent import duty on the two precious metals, which has now been directly raised to 15 percent. Gold traders fear that the new rules, which will come into effect from Wednesday, may cause panic in the gold and silver markets. The move comes just 24 hours after Prime Minister Narendra Modi urged the country not to buy gold for the coming year.
According to government sources, 10 percent import duty on gold and silver and 5 percent agricultural infrastructure and development cess have been imposed so far. This will increase the price of imported gold in the country at a significant rate. The government hopes that this decision will reduce the rate of import of gold from abroad and thereby reduce the country’s trade deficit. The Center also believes that this will prevent the depreciation of the Indian rupee against the dollar. As India is currently the second largest consumer of gold in the world, the government has to spend huge amounts of foreign exchange to meet the demand.
Prime Minister Narendra Modi on Monday urged the country to protect its foreign exchange reserves. India’s foreign exchange reserves fell sharply in late April. Currently, due to the war-like situation in West Asia, the price of crude oil has increased and with it the cost of imports. In such an unstable economic environment, the government wants to control the import of gold to stabilize the country’s economy. India requires about 700 to 800 tonnes of gold annually but produces only one or two tonnes domestically. So almost 90 percent of gold has to be bought from abroad.
The government’s new move may hurt the common consumer but is necessary for the overall economy of the country. The main objective of the tax hike is to strengthen the economic base of the country by reducing the amount of going abroad. While the drive to invest in gold in the country is on the rise, the government is looking to phase out or temporarily curtail this investment. Buying gold can be a challenge for the common man in the current scenario.
post Fear of rising gold and silver prices! The government imposed 15 percent duty on imported gold appeared first Northeast Now (Assamese).
