India has raised import tariffs on gold and silver to 15% from 6%, Reuters quoted government orders as saying on Wednesday.
The move aims to reduce imports of the precious metals in India, the world’s second-largest consumer of gold and silver, and ease pressure on the country’s foreign exchange reserves. It may also help reduce the country’s trade deficit and support the weakening rupee.
On Tuesday, the Indian rupee weakened to a record low of 95.6 against the United States dollar amid elevated global oil prices and economic headwinds caused by the conflict in West Asia. The previous all-time low of 95.4 was recorded on May 5.
The move also came after Prime Minister Narendra Modi on Sunday urged citizens to avoid buying gold and adopt “nationally responsible” lifestyle choices to help the country withstand global economic uncertainty caused by the war.
Demand for gold, particularly as an investment, has risen in India following a recent rally in prices and weak equity returns over the past year, Reuters reported
India has been trying to discourage gold imports and in recent weeks had imposed a 3% integrated goods and services tax on gold and silver imports, prompting banks to halt purchases for more than a month.
As a result, gold imports in April fell to their lowest level in nearly...
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