India not plan to trim Gold import duty from 10% immediately

It appears that India’s 10% gold import duty, initiated last year, will continue even as an important gold-buying holiday approaches, according to analysts.

The country is not considering an immediate cut in gold import duties despite its trade account deficit narrowing over the past year, according to a Reuters report quoting Trade Minister Nirmala Sitharaman. 

“Since the curb in the gold trade, local merchants and dealers expressed optimism for a possible rollback in these restrictions as India’s current account deficit has narrowed to 1.7% of GDP (gross domestic product) for the quarter ending in June from the all-time high of 4.8% a year earlier,” said HSBC. 

“This news comes at a time when India’s appetite for gold traditionally improves from seasonal demand. Diwali, also known as the festival of lights, is on 23 October and is the largest gold-buying holiday in India,” HSBC added. 

According to INTL FCStone, the import duties have reportedly increased the amount of gold being smuggled into the country. India is important to the gold market as one of the world’s two largest buyers, along with China.