The government on Monday slashed import tariff value on gold and silver to $408 per 10 grams and $617 per kg respectively, in view of weakness in bullion prices globally.
Most investors should have a 5% to 10% allocation to gold for diversification. They should stagger their investments to mitigate timing risk.
The commerce ministry is working on different scenarios to assess the possible fallout of reciprocal tariffs to be imposed by the US administration on April 2 on its key trading partners including India, sources said. US President Donald Trump has said that April 2 will be 'Liberation Day' as he plans to announce tariffs or import duties to bring down America's trade deficit, and promote the country's manufacturing.
In Singapore, gold prices have risen by 0.46 per cent to $ 1,294.20 from $ 1,288 per ounce in last one fortnight.
The government on Monday reduced import tariff value on gold to $388 per 10 grams and on silver to $540 per kg, following global price trends.
Simplifying GST rates, removing exemptions, easing disputes, and speeding up refunds can boost investment in India and offer the best reply to Trump's tariffs, observes V S Krishnan, former member, Central Board of Indirect Taxes and Customs.
The government on Wednesday increased the import tariff value on gold and silver to $408 per 10 gram and $520 per kg, respectively in line with global prices.
The stringent curbs on gold imports has resulted in a huge flow of smuggled gold, being financed by buying dollars from the hawala market.
The United Arab Emirates (UAE) has agreed to look into India's concerns over compliance to rules related to the import of silver products, platinum alloy and dry dates, the commerce department said on Tuesday. During a joint committee meeting under the India-UAE trade deal, officials from New Delhi raised concerns over the recent surge in imports of these products. These were being shipped to India, taking advantage of the lower tariffs under the pact.
Sales of gold coins and bars should be curbed after reaching around 300 tonnes
Last month's deficit stood at $9.22 billion, the trade ministry said, compared with $10.56 billion in October -- a traditional gold buying season.
'When the gold price rises rapidly, India's physical gold market remains on standby.'
Government on Friday hiked the import tariff value on gold and silver to $433 per 10 grams and $699 per kg, respectively, taking into account the volatility in the precious metals' global prices.
The government on Thursday slashed the import tariff value on gold for the second straight day to $ 414 per 10 grams and silver to $672 per kg, in line with weak global prices of the precious metals.
New investors should avoid short-term, tactical entries and instead go for staggered buying via ETFs to manage volatility.
Import duty on gold is already hiked by a third to 8 per cent.
US President Donald Trump has announced a 25 per cent plus tariff on India from Aug 1. Trump, describing India as a "friend", said the US has done relatively "little business" with the country because of its high tariffs.
The Indian industry is paranoid about the USA's plan to impose reciprocal tariffs and wants early conclusion of a bilateral trade agreement, sources said on Wednesday. They said that the talks for the proposed bilateral trade agreement are going well.
"India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits," Trump said in a social media post on Monday.
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Analysts worry that without more fundamental reforms, India will struggle to contain its record high current account deficit and hence support the rupee.
The import tariff value is the base price at which the customs duty is determined to prevent under-invoicing.
Of Trump's reciprocal tariffs and trade deals
The rise in illegal imports of the yellow metal has caught the eye of the finance ministry.
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Earlier, similar restrictions were imposed on commercial banks.
Since the last nine years, gold investors have made money each year, while gains in silver have been consistent only in the last five years.
India and the US have decided to hold sector-specific talks in the coming weeks to finalise the structure of the proposed bilateral trade agreement (BTA), the government said on Saturday. The engagement between the two countries came in the backdrop of the USA's threat to impose reciprocal tariffs on its key trading partners, including India, on April 2.
Gold, the safest haven amid the ongoing uncertainty, also emerged as one of the most lucrative investment options in financial year 2022-23 with an impressive return of 16.1 per cent in rupee terms, and 2.3 per cent returns in dollars. And, had it not been for the very high inflow of smuggled gold and the huge discount prevailing in the market due to high prices, the returns in gold would have been much higher, analysts said. The precious metal has consistently been delivering positive returns in India since 2016.
It rose to 310 tonnes in the second quarter ended June.
'Reduce your equity allocation, put that allocation into gold and fixed income.'
Amid the ongoing global tariff war, Reserve Bank Governor Sanjay Malhotra on Wednesday said he is more worried about its impact on growth than inflation. Speaking to the media after presentation of the first bi-monthly monetary policy for the current financial year, Malhotra said, RBI has reduced the growth forecast for 2025-26 by 20 basis points to 6.5 per cent.
Gold prices are set to drop further in the domestic market, owing to the rupee's appreciation.
A sharp fall in Sensex and rupee against dollar and strong global cues also contributed to the upsurge in gold price, which posted the biggest single-day gain after August 19, 2011. Interestingly, the metal had shot up by Rs 1,310 on August 19, 2011 as well.
World Championship challenger D Gukesh on Sunday said he didn't think about his personal achievements and was prepared to do "whatever it takes" to secure India's maiden gold medal at the Chess Olympiad following near-misses in previous editions.
The moves by the RBI, announced late on Wednesday, should increase supplies of gold and brighten the earnings outlook for jewellery makers after the government took tough measures to curb imports last year, analysts said.
Goods from sectors, including agriculture, precious stones, chemicals, pharma, medical devices, electricals, and machinery may get impacted if the US will go ahead with imposing reciprocal tariffs on Indian products, according to experts. They said that these sectors could face additional customs duties from the Trump administration because of the high tariff differential or gap, which is the difference between the import duties imposed by the US and India on a product.
India and the United States will finalize the contours, schedule of negotiations, and terms of reference for a proposed bilateral trade agreement (BTA) during a three-day meeting beginning Tuesday. The agreement is expected to be finalized in two tranches, with the first phase focusing on goods trade. The US team, led by Assistant US Trade Representative for South and Central Asia Brendan Lynch, will be in India from March 25-29 to discuss the agreement. Both countries are aiming to conclude the first phase of the agreement by fall 2025.
Report says gold being exported by persons of Indian origin and routed through Dubai
Gold and silver imports declined 80.55 per cent to $1.05 billion in November after a slew of measures taken by the government to curb inbound shipments of the metal, aimed at narrowing the current account deficit.
'Look after your own mother before looking after your neighbour's mother.' 'I don't believe in starving my own mother and feeding sweets to the neighbours.'
Gold demand in India is expected to be robust in 2014, likely leading to a further jump in smuggling if curbs on bullion imports remain, the World Gold Council (WGC) said.
