The Indian Gold & Jewellery industry, which was looking forward to a reduction in the import duty on gold in the Union Budget 2019 is disappointed with today’s announcement of the import duty being hiked from 10 to 12.5 %.
Somasundaram PR, Managing Director, India, World Gold Council, one of the first to react, comments as follows:
“Today’s announced import duty hike on gold from 10% to 12.5% will negatively impact India’s gold industry. It will impede efforts to make gold as an asset class particularly when gold prices are already rising globally. In addition, the grey market will thrive which will dilute efforts to reduce cash transactions.
Millions of Indians invest in gold as part of their household savings, not simply as discretionary spending for consumption. People buy gold as a long-term investment to protect their wealth and gold also has huge significance socially, emotionally and economically in India.
An increase in duty will be counterproductive to the objectives stated in the previous year’s budget and encapsulated in NITI Aayog’s recommendations for transforming the gold market. We believe that gold can play a positive role in the Indian economy, but to enable this; there needs to be a reduction in overall taxes, a stable policy environment, and a transparent trading market.“