The government is thinking of taking further steps to curb gold import in the country, Chief Economic Adviser Raghuram Rajan said on Monday. “We have taken number of measures to curb gold import. The government will never say its end of it,” Rajan said on the sidelines of a workshop here.
The government recently hiked the import duty on gold from 6% to 8% in bid to contain India’s appetite for the yellow metal and lower the widening Current Account Deficit (CAD). This was the second increase in import duty of the precious metal in six months. India has already imported around 152 tonnes in the first two months of the current financial year as compared to 70 tonnes in the same period last year.
Surging gold imports have pushed up trade gap which touched record high of 6.7% of the GDP in December quarter of 2012-13. CAD is expected to be around 5% in the last financial year.
High trade gap negatively affects the value of currency. “We are undergoing period of volatility in rupee...Obviously in the government, we don’t like to see volatility... This could be temporary phenomenon,” Rajan said.