Govt hikes import duty on gold jewellery to 15%

NEW DELHI: The government on Tuesday raised customs duty on imported jewellery to 15% from 8% to protect the domestic industry. It would also help reduce gold imports further.

“To protect the interests of small artisans, the customs duty on articles of jewellery... is being increased,” a finance ministry statement said on Tuesday. Gold imports in the first four months of the current year rose 87% to 383 tonnes.

India’s $88 billion current account deficit in 2012-13 was third highest in the world, contributed largely by high imports of gold, oil and coal.

The government is counting on a the various measures announced to curb gold purchases to lower the current account deficit to $70 billion in the current fiscal, 3.7% of GDP.

The government had raised import duties on gold to 10% in August, the third increase this year, while the RBI separately imposed restrictions on imports including a ban on coin and medallion to contain yellow metal demand and stem rupee slide.

Forward Markets Commission has raised the initial margin on gold futures to 5% of the value of contract from 4% on all the exchanges in the country.

The hike in the duty on jewellery was demanded by the domestic industry on concerns over imports of cheaper jewellery from Malaysia and elsewhere.

“This is a good move for the local industry and it will support the manufacturing sector,” said Haresh Soni, chairman of the All India Gems and Jewellery Trade Federation.