India Govt hikes import duty on Gold, Silver, Platinum-smuggling may increase

According to P Chidambaram, who announced the decision on Tuesday, Government could earn Rs 4830 cr in the remaining period of 2013-14 fiscal year as a result of the increase in import duties. Meanwhile, some analysts pointing to recent reports of increase in gold smuggling has pointed out that import curbs could lead to further rise in smuggling through airports.

India Government has hiked import duty on Gold, Silver and Platinum to 10%. The previous duty rates were 8% for platinum and gold and 6% for silver.

According to P Chidambaram, who announced the decision on Tuesday, Government could earn Rs 4830 cr in the remaining period of 2013-14 fiscal year as a result of the increase in import duties. Meanwhile, some analysts pointing to recent reports of increase in gold smuggling has pointed out that import curbs could lead to further rise in smuggling through airports.

In the month of July alone, customs seized over 13kg of gold bars worth Rs 3.6 crore from passengers at Cial. Of late, smugglers have started using couples and women as carriers to bring gold bars and jewellery, Times of India reported.

To contain sliding value of rupee and widening current account deficit (CAD), India Finance Minister on Monday said he would announce steps to compress demand of gold, silver, oil and non-essential items.

The Minister had also said the notifications effecting changes in the duty rates would be tabled in Parliament on Tuesday.

Besides changes in import duty structure, Chidambaram had yesterday announced other measures including easier overseas borrowing norms to fetch an additional $11 billion this fiscal to rescue rupee and contain the burgeoning CAD to $70 billion or 3.7 per cent of the GDP.