The Centre has sharply increased the import duty on gold, silver and other precious metals, taking the effective import tax to 15 percent from the earlier 6 percent.
According to a Finance Ministry notification issued on May 13, the government has imposed a 10 percent basic customs duty along with a 5 percent Agriculture Infrastructure and Development Cess (AIDC) on imports of gold and silver.
Earlier, the basic customs duty on these imports stood at 5 percent, while the AIDC was 1 percent.
The latest revision is expected to make imports of precious metals significantly more expensive and may push up domestic jewellery prices in the coming weeks.
The government’s move comes amid concerns over rising gold imports and the pressure they place on India’s trade deficit and foreign exchange reserves.
Industry observers said the higher import duty could dampen demand in the short term, especially in the jewellery sector, while also widening the gap between domestic and international gold prices.
India is one of the world’s largest importers and consumers of gold, with demand driven mainly by jewellery purchases, festivals and investments.