Govt Weighs Gold, Silver Duty Cut Amid Rising Smuggling Concerns
What Happened
The government is reportedly discussing a possible reduction in import duties on gold and silver after the current 15% duty failed to significantly curb imports. Industry representatives say the higher levy has instead led to a rise in unofficial trade and smuggling, while imports have remained largely unaffected. No final decision has been taken yet.
Key Takeaways
The debate highlights a policy dilemma: while higher duties were introduced to protect foreign exchange reserves and reduce imports, industry bodies argue they have expanded the grey market without achieving the intended reduction in demand. A duty cut could help shift trade back to formal channels and support the jewellery sector, but any change would need to be balanced against concerns over the current account deficit and forex reserves.