Govt may hike gold duty further to reduce gold imports

New Delhi: Measures like raising customs duty are expected to lead to moderation in gold imports which is putting pressure on current account deficit, Minister of State for Finance Namo Narain Meena said today.

To reduce gold imports, the government in January had raised the import duty on gold and platinum to six percent from four percent. It has also proposed to provide a link between the Gold ETF and the Gold Deposit Scheme with an objective to unfreeze or release a part of the gold physically held by mutual funds under the Gold ETF.

[caption id=“attachment_657651” align=“alignleft” width=“380”] In 2011-12 the import was $56.3 billion. Reuters[/caption]

“It is hoped that these measures would lead to moderation in the quantity of gold imported into the country, and also help in narrowing the trade and current account deficit (CAD) in medium term,” Minister of State for Finance Namo Narain Meena said in Rajya Sabha in a written reply.

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Gold imports have increased in recent years and were valued at $42 billion in the April-January period of the current fiscal. In 2011-12 the import was $56.3 billion. High gold imports are putting pressure on the country’s CAD, which touched a peak of 5.4 percent of the GDP in the July-September quarter of the current fiscal. Trade deficit during April-February 2012 was $182.1 billion.

PTI