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Rediff News  All News  » Business » Govt hikes import duty on gold jewellery to 15%

Govt hikes import duty on gold jewellery to 15%

September 17, 2013 19:05 IST

The government pushed import duty on gold jewellery up by half to 15 per cent, the finance ministry said on Tuesday, setting it higher than raw gold duty in a move aimed more at protecting the domestic jewellery industry than stemming bullion imports.

India imported gold jewellery worth $137.57 million in the four months from April to July this year -- a fraction of overall bullion imports, which were $2.9 billion in July alone.

The government has curbed gold imports through measures including three duty hikes this year to a record 10 per cent and the central bank has put tight restrictions on importers that have sharply curtailed supplies.

India, the world's biggest buyer of bullion, had imported a record 162 tonnes in May and creating a headache for the government which is trying to curb a wide current account deficit and support a weak rupee.

Gold is the biggest non-essential item in India's import bill but jewellery is a tiny fraction of the purchases.

The hike in import duty on jewellery had been a demand from the industry to ensure the viability of the domestic jewellery manufacturing, and avoid imports of cheaper jewellery from Thailand, Malaysia or elsewhere.

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