Gold prices in India rise further after hike in import duty

Gold prices in India extended their gains from the previous week as the Centre raised the import duty on the yellow metal, a measure to disincentivize the imports amidst the widening trade deficit.

The Centre has raised the basic import duty on the gold from 7.5 per cent to 12.5 per cent effective July 1, reports ANI.

India’s trade deficit widened to a record $24.29 billion in May 2022 from $6.53 billion in the same month last year due to a sharp jump in the country’s imports, as per data released by the Ministry of Commerce and Industry.

On Monday, the gold prices on the Multi Commodity Exchange of India rose 0.5 per cent to Rs 52,158 per 10 gm. On Friday, the gold prices saw a steep rise of over 2 per cent on the MCX.

Gold prices in the physical markets rose by over Rs 900 on Friday, and by another Rs 500 on Monday to Rs 52,340 per 10 gm, data from India Bullion and Jewellers Association showed.

Country’s Union Finance Minister Nirmala Sitharaman has said that the customs duty on gold has been increased to discourage the high import of gold into the country.

“There has been a sudden surge in imports of gold. In the month of May, a total of 107 tonnes of gold was imported and in June also the imports have been significant. The surge in gold imports is putting pressure on the current account deficit,” a statement by the Ministry of Finance said.

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