Dubai: The chances of the new Indian Government reviewing the current high import duty on bullion — at 10 per cent — are high, according to sources in the local gold and jewellery trade.
“If the trend of a stronger rupee is maintained, the chances are that it would reflect positively on gold prices within the Indian domestic market,” said Cyriac Varghese, general manager at Sky Jewellery. “At the Rs57-60 a dollar levels, there would be no need to maintain such high import duties.”
Since early last year, the Congress-led government had initiated tough measures to curb gold consumption into the country.
Import duties were raised twice and new requirements were imposed on the bullion market when it came to buying. To a great extent, it did succeed as India slipped to the second position behind China as the metal’s biggest consumer last year.
“There was no perceived spike in gold buying activity from Dubai/UAE from buyers headed for India during the run-up to the elections. The recently installed Indian customs requirement of mandatory documentation of gold being brought in and whether it should be declared has impacted on the level of movements. For instance, would a woman passenger wearing a standard 4-sovereign (32-gram) fall foul if she does not put that on the document? There’s no clear answer and that doubt has been planted and that has had some impact,” he said.
