Import duty on gold hiked to 12.5% in Budget 2019
Budget 2019 has proposed to hike the import duty by 2.5 per cent.
Will it encourage gold smuggling? Minawala thinks so. “The smuggled gold is estimated to be around 15-20% of the official gold imports. This move will make it more attractive,” he complains. However, Sudheesh Nambiath, Head, India Gold Policy Centre at IIMA thinks that a part of this incentive will be eliminated by the 2% TDS on cash withdrawals above Rs 1 crore from a bank.
Will investors in gold gain from this hike? No, because domestic gold price is more of a function of international gold price and dollar exchange rate. “This is a one-time hike and the market has already reacted to it. So there is no opportunity now,” says Singh.