Impact of Import Duty Increase in Budget on Gold Market: World Gold Council
In a recent statement, the World Gold Council (WGC) expressed concerns over the potential adverse effects of any increase in import duties on gold in the upcoming Budget. The government’s decision to reduce import duties on gold in July of last year had a significantly positive impact on the industry, and the WGC is urging against any tariff hikes that could reverse this progress.
Sachin Jain, Regional CEO of India for the WGC, emphasized the importance of maintaining the current positive momentum in the gold industry. He warned that raising import duties could lead to an increase in smuggling, higher domestic gold prices, and setbacks for the industry as a whole. Jain called for collaboration among stakeholders, including government bodies, industry players, and financial institutions, to sustain the industry’s growth and innovation.
The gold industry is a vital contributor to India’s economy, accounting for an estimated 1.3 percent of the GDP and employing millions of people. The reduction in customs duty on gold in the last Budget, from 15 percent to 6 percent, had a positive impact by reducing unofficial imports, stabilizing official channels, and promoting domestic gold purchases. This move led to a more organized and transparent industry, creating a stronger gold market.
As the budget session of Parliament approaches, all eyes are on the upcoming economic announcements. The budget is set to be presented on February 1, following the Economic Survey on January 31. With weak GDP numbers and consumption in the economy, the government’s economic guidance for the remainder of the Modi 3.0 tenure will be closely scrutinized.
The WGC is hopeful for progressive, people-friendly, and industry-supportive policies to be announced in the Budget. The future of the gold market in India hinges on maintaining a favorable environment for growth and innovation. As stakeholders prepare for the upcoming Budget, the importance of fostering collaboration and synergy within the industry cannot be overstated.
