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Govt hikes import duty on gold to cut current account deficit

This is the second time that the government has increased the import duty on gold in an attempt to curb imports

June 06, 2013 8:14 IST | India Infoline News Service
The finance ministry has increased the import duty on gold to 8% from 6% to restrict import of gold and help control the widening current account deficit.

The government had raised the basic customs duty on gold and platinum from 6% to 8% and the changes come into effect immediately, the finance ministry said in a statement on Wednesday.

This is the second time that the government has increased the import duty on gold in an attempt to curb imports. In January, the government had raised the duty to 6% from 4%.

The government and the Reserve Bank of India (RBI) have taken several measures in the past few months to tame gold imports, which is partly responsible for the widening of the current account deficit (CAD).

The CAD widened to a record 6.7% of gross domestic product in the December quarter. For the full fiscal, it is expected to ease to 5%.


Gold for immediate delivery traded at $1,399.20 an ounce at 6:43 a.m. in Mumbai, down 16% in dollar terms this year compared with a 13% in rupees. The dollar price reached a two-year low of $1,321.95 on April 16 after rallying for the past 12 years in the longest bull run in at least nine decades.

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