New Delhi: The Union government has increased the basic import tax imposed on gold. The import duty on gold is hiked to 12.5 from 7.5%. The government took this decision to hike the import duty to reduce the trade deficit.
India is the world’s second biggest consumer of gold. The gold demand in the country is fulfilled by imports. The experts claim that the hike the import duty will surge the price of gold and thus will reduce its demand. The reduced demand in India will also weigh on the global prices.
Also Read; Commodity Market: Gold price inches higher
India’s May trade deficit widened to $24.29 billion from $6.53 billion a year ago. The gold imports in the month surged to $6 billion from 678 million a year ago.
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