India raises import obligation on gold by 5 percent

India raises import obligation on gold by 5 percent

The Central government has raised the import duty on gold from 7.5 percent to 12.5 percent, as per an official gazette notification. The revised import duty will come into effect from 2022 July 1, the notification said.

India is the second-largest consumer of gold. It satisfies a significant part of its interest through imports. The vertical modification in the import duty is viewed as a measure to dis-incentivize imports amidst the widening of the extending import /export imbalance. India’s import /export imbalance widened to a record $24.29 billion in May 2022 from $6.53 billion in the same month last year due to a sharp leap in the nation’s imports, according to information released by the Ministry of Commerce and Industry. After the declaration of the import duty hike, gold costs on the Multi Commodity Exchange of India rose over 2 percent to Rs51,600 per 10 gm.