CHENNAI: The reduction in customs duty on gold and silver in the budget has brought cheer to the jewellery industry.
The jewellers have lauded the duty cut, a long-standing demand of theirs. They believe the reduction in import duty will help attract more gold buyers at a time when the demand for the yellow metal has taken a beating. At the same time, it will also encourage both manufacturing and exports of jewellery from the country, they insist.
Finance minister Nirmala Sitharaman had reduced customs duty on gold and silver to 7.5 per cent.
Sitharaman said, "Gold and silver presently attract a basic customs duty of 12.5%. Since the duty was raised from 10% in July 2019, prices of precious metals have risen sharply. To bring it closer to previous levels, we are rationalising customs duty on gold and silver."
Somasundaram PR, Managing Director, India, World Gold Council, said, "The rationalisation of import duty on gold is a welcome move and timely. Hopefully, this is the first of a series of such cuts to make bullion an asset class that operates mainstream. It is a much-needed incentive for the organised and compliant players in the bullion and gold jewellery market."
He added that "following the appointment of IFSCA to regulate the International Bullion Exchange at GIFT City last year, the regulatory clarity in this budget around a domestic bullion exchange will spur infrastructure development and good delivery standards, enabling India to emerge as a major bullion trading hub."
All India Gems and Jewellery Domestic Council's chairman Anantha Padmanaban said with the reduced import duty, the price of gold will come down and this will attract more buyers to invest in gold.
"The move will not only help to check illegal gold trade, but it will also result in improving government's revenue from the jewellery sector," said Padmanaban.