Gold, silver import duty raised to 15% in bid to secure forex

The Central government Wednesday hiked the customs duty on gold and silver imports from 5% to 10%, and Agriculture Infrastructure and Development Cess (AIDC) from 1% to 5%, taking the total effective import duty to 15%.

This may be the first of a series of measures to bring stability to the capital account and prevent the rupee from further depreciation. It closed at 95.71 to a US dollar on Wednesday, losing almost 5 per cent since the beginning of the West Asia conflict. There are discussions already in the government about hiking petrol and diesel prices with global crude oil sizzling at over $100 a barrel and state-owned oil marketing companies suffering losses of almost Rs 1,000 crore to Rs 1,200 crore a day.

The import duty hike on gold comes in the wake of Prime Minister Narendra Modi’s call for austerity measures and appeal to citizens to reduce petroleum consumption, avoid non-essential foreign travel and gold purchases for a year as part of measures to help the country deal with global disruptions and challenges.

The government has also increased import duty on gold and silver findings to 5% – the findings are small components such as hooks, clasps, clamps, pins, screws used to hold the whole or a part of a piece of jewellery in place. Platinum findings will attract a 5.4% import duty.