While an import duty is ruled out, a small excise duty on jewellery manufacturing can be on the cards.
The Finance Minister has withdrawn excise exemption on 130 items and a nominal central excise duty of 1 per cent is being levied on these 130 items that are mainly in nature of consumer goods.
Domestic customers will get access to high-quality Swiss products such as watches, chocolates, biscuits, and clocks at lower prices as India will phase out customs duties under its trade pact with the EFTA bloc on these goods over a period of time. India and the four-European nation bloc EFTA signed a trade and economic partnership agreement (TEPA) on Sunday to boost trade and investments between the two regions. The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.
In Zaveri Bazar, gold is being traded at Rs 26,920/10 gm
The trade war between the US and China is expected to benefit Indian exporters in increasing their shipments to the American market, sources said. They said the country was the fourth-largest gainer when the US imposed higher duties on Chinese goods during US President Donald Trump's first tenure.
The Commerce and Industry Ministry is pitching for easing of the gold import restrictions to boost gems and jewellery exports
The Prime Minister's Economic Advisory Council Chief further said that 'inflation is showing signs of coming down and therefore attraction of financial products will be greater'.
An Indian official team is likely to visit Washington next week to iron out differences on certain issues before formally launching negotiations for the proposed India-US bilateral trade agreement (BTA), an official said. The visit, which comes within weeks of a high-level US team visiting India, indicates that the talks for the BTA are gaining momentum.
The government has asked jewellers to provide information on purchases of gold bars or jewellery worth more than Rs 500,000 by the end of this month, a move seen keeping a check on big transactions amid rising smuggling.
Finance Minister Pranab Mukherjee on Monday broke hearts of fairer sex by increasing import duty on gold bars, but tried to be even handed by raising income exemption limit for women by Rs 10,000 and by exempting excise on branded jewellery.
Supply through recycling of used gold declined to around 10 tonnes in the second quarter of the current calendar year.
India's biggest jewellers' association has asked members to stop selling gold bars and coins.
Mobile phones and TV sets manufactured in India would become cheaper with Finance Minister Nirmala Sitharaman announcing cuts in Basic Customs Duty (BCD) on import of their components but smokers would have to pay more as the government has increased taxes.
India's current account deficit, which is the excess of foreign exchange outflows over inflows, touched a historic high of 4.8 per cent of GDP in 2012-13, mainly due to rising imports of gold and petroleum products.
Reversal is because of strengthening rupee, subdued demand, and lack of reasons for bulls to continue positions and speculation of reduction in import duty.
They are encouraged by the widening gap in import duties on raw and refined gold.
Gold prices are struggling and are down 18 per cent from their March highs. But stock prices have fallen even more. As a result, the precious metal has begun to outperform equities - both in the domestic market and international markets. Gold prices are up 2.6 per cent in the domestic market in the current calendar year (CY22) so far, according to the World Gold Council (WGC), compared to a 1.7 per cent decline in the Sensex year-to-date (YTD).
Of the 11,000 kg imported between July 1 and August 9, around 90 per cent was brought in by two business groups which took advantage of the favourable reduction in tax incidence under GST, routing their imports through Korea.
Huge gold imports have put pressure on the country's CAD, which in turn is affecting the value of rupee.
In China, premiums fell to about $1.50 an ounce on Friday from $2-$3 an ounce.
Based on the estimate, a courier bringing in 1 kg of gold currently worth around $40,000 at world prices could earn $470 if not caught.
Meanwhile, retail jewellery sales in India have declined by 50 per cent since gold price started its uptrend nearly two weeks. Buyers deferred their fresh purchase amid expectations of a correction in gold prices from the current high level.
Duty changes in the Budget make refining unviable.
Gold rallied to scale two-month peak at the domestic bullion market on Thursday on frantic buying in the backdrop of the government's decision to raise import duty on the metal.
India imported 769 tonnes of gold in 2014, down from 825 tonnes in 2013.
They are now scaling or shutting down their businesses because they can't compete with untaxed grey market gold. India's gold smuggling has increased significantly since the import duty was increased in the Union Budget 2019 in contravention with the broader market expectations of a cut.
CAD touched a historic high of $88 billion in 2012-13.
Air travellers currently can bring a flat screen television for personal use without paying any duty.
'Although China has been ruling over Tibet for past 75 years, it has no legitimacy.'
Exports were up 0.8 per cent in Jan while imports rose 6 per cent.
On its part, the Reserve Bank of India tried to help exporters by easing some restrictions imposed on holders of Exchange Earners Foreign Currency accounts and by giving effect to the commerce minister's announcements regarding extension of the interest subvention scheme for one more year and for more items.
The tariff value on imported gold earlier stood at $398 per 10 grams, while on silver at $643 per kg.
Official sources say that the finance ministry is aware of the possible spike in smuggling activity and has already asked intelligence agencies to tighten their vigilance and come down on the unofficial entry of gold into India.
Govt mulls raising duty on non-essential goods with annual import bill exceeding $1 billion
The government on Friday raised the import tariff value of gold to $461 per ten grams and of silver to $803 per kg as prices of the precious metals touched all-time high this week.
In the wake of rising global prices of precious metals, the government on Thursday hiked import tariff value of gold to $531 per 10 grams, while the value was kept unchanged at $899 per kg for silver imports.
The import tariff value is the base price at which the customs duty is determined to prevent under-invoicing.
A depreciating rupee, which briefly hit 80 to the dollar on Tuesday, may boost India's exports but price-inelastic imports of crude oil and gold would mean limited relief on the trade deficit, which clocked a record $26.2 billion in June. Due to global risk aversion on the back of geo-political tensions and aggressive policy tightening by the Fed, the dollar has appreciated against most currencies, including the rupee. And, with other currencies depreciating, India's comparative advantage in this respect may be limited.
Buying had been muted in the past few weeks.
Lieutenant General Shakti Gurung deserves to be complimented in telling his life story and that of his people, as subaltern communities within this vast and diverse nation of ours clamour for recognition and a plea for their voices to be heard and their aspirations to be met, notes Lieutenant General Gautam Moorthy.
