The Finance Ministers decision to hike import duty on gold from 10 per cent to 12.5 per cent will be a double whammy for the gold retail industry, a segment which is critical for creating the much-needed jobs for the economy.
This is because on the one hand, it will lead to a substantial increase in input costs of the industry, sending retail prices up and hitting sales. On the other hand, it will provide a stimulus to illegal shipment of gold into the country which will further hurt taxpaying players in the segment.
Therefore, considering the critical role of the gold industry in supporting economic growth and job creation as well as exports, the government may reconsider this move. It is our long pending demand that the government should lower the import duty on gold to 5 per cent level to make illegal trade in gold unattractive.
(The writer Ahammed MP is Chairman, Malabar Gold & Diamonds. The views expressed are personal)