New India govt may relax Gold import duty: HSBC

With the election of the Bharatiya Janata Party in India last week, there are hopes that some of the onerous duties on gold imports will be lifted, said HSBC.

HSBC citing a story from Bloomberg, the director of the All India Gems and Jewelry Trade Federation was quoted as saying that India will probably cut the 10% tax on gold imports and relax the 80-20 rule in July.

These restrictions were put on gold in 2013 to help reduce India’s current account deficit, which has fallen to 2.81% from 5.36% last year, said HSBC

“Earlier in the year, members of the BJP said that the gold trade restrictions may be put on review within three months after their victory. An easing of India’s bullion trade restrictions would be price supportive and may help stem the potential for further losses, in our view,” HSBC concluded.