The yellow metal is likely to become further dearer in India with the Centre’s recent increase in import tariff on gold and silver to 15 per cent from 5 per cent, along with a 5 per cent AIDC, intended to curb precious metal imports, narrow the trade deficit and support the falling rupee amid mounting external pressures.
Seeking to counteract the deleterious effects of a burgeoning current account deficit, the Union Finance Ministry promulgated a series of fiscal notifications on Tuesday, thereby mandating a precipitate escalation in the basic customs duty for diverse categories of bullion from a modest 5 per cent to a formidable 10 per cent.
This strategic recalibration, augmented by the immutable 5 per cent Agriculture Infrastructure and Development Cess, effectively culminates in a 15 per cent aggregate tariff, which concurrently serves to extinguish the short-lived relief afforded by the previous year's duty concessions.
The Finance Ministry has simultaneously recalibrated the duty framework applicable to precious metal findings and recyclable precious metal waste, broadening the scope of the revised tariff architecture. Under the amended structure, gold and silver findings will attract a 5 per cent customs duty, while platinum findings will be subjected to a slightly higher levy of 5.4 per cent.
In a nuanced attempt to facilitate industrial reclamation while maintaining oversight, the Ministry has further instituted a concessional 4.35 per cent duty upon spent catalysts and ash containing precious metals, provided such imports undergo stringent compliance protocols and obtain the requisite recycling clearances.
As the world’s pre-eminent importer of silver and second-largest consumer of gold, India remains acutely vulnerable to global volatility; thus, this protectionist pivot emerges as an indispensable bulwark against the twin tempests of surging crude oil prices and an insatiable domestic appetite for overseas bullion.
Faced with the formidable task of stabilising a beleaguered currency, the government has opted for this austere fiscal tightening to insulate the domestic economy from the caprices of international markets and to rectify the structural imbalances inherent in its trade ledger.