Indian Gov Hikes Import Duty on Gold Jewellery to 15%

House · Sep 17, 2013

NEW DELHI: The government today increased the import duty on gold and silver jewellery to 15 per cent from 10 per cent to protect the domestic industry, although it would make ornaments more expensive for consumers.

"To protect the interests of small artisans, the customs duty on articles of jewellery and of goldsmiths' or silversmiths' wares and parts thereof is being increased from 10 per cent to 15 per cent," an official statement said.

It said an import duty differential between jewellery and the primary metal is needed to protect millions of artisans who depend on the labour-intensive industry after the duty on gold was increased in stages to 10 per cent on August 13.

In the absence of any duty differential, it said, "there is an apprehension that Indian jewellery makers would not be able to compete with cheaper imports, particularly when majority of the imported jewellery is machine-made as compared to handmade jewellery in India."

The differential was 8 per cent in the case of gold jewellery and 4 per cent for silver jewellery in January 2012, when the government previously revised the levy on gold jewellery.

"The government has taken the right step by hiking the duty on gold jewellery. This will help protect domestic artisans," said P C Jewellers Managing Director Balram Garg.

Gold jewellery imported during 2012-13 stood at $5.04 billion. In the April-June quarter of the current financial year, it was $112 million. India imports the maximum jewellery from Thailand.
Besides providing a level playing field for domestic jewellery makers, the hike in jewellery duty seeks to contain imports of gold ornaments.

The customs duty on articles of jewellery had not been increased in line with the changes in duty rates on gold, silver and platinum since January 17, 2012, the official statement said.

Until now, the customs duty on both the primary metal and the articles of jewellery/goldsmiths' or silversmiths' wares were the same at 10 per cent, it added.

Further, the RBI also restricted the import of gold on a consignment basis by banks.

Gold imports in value terms fell to $650 million in August, from $2.2 billion in July.
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Economic Times

AngloSaxon · Sep 18, 2013

The article states this is for finished jewellery, but not bullion. This is protectionism for the skilled Indian jewellery smiths. This should increase the amounts of industrial bullion required for import to meet the demand for jewellery.

Guest · Sep 19, 2013

I was in India earlier this year and I can guarantee that nothing the government can do will decrease the Indian's apatite for gold. Gold is fully ingrained in their culture. Nobody on Earth can undo a few thousand years of culture, with laws or restrictions.

CoinExplorer · Sep 19, 2013

Did you see where someone dropped a dime on two women trying to smuggle 20 kg of gold through Cochin International Airport from Dubai? They had special jackets with pouches to hold the gold bars underneath burqas. $939,000 in gold, and they got busted.

They've only seized 23 kg of gold total at that airport in the last 6 months, so this shows things are really ramping up. Also, the profit if they'd gotten away with it would have been $97,000. (Profit for the smuggling ring that is, they were just mules.)

perthsilver · Sep 20, 2013

CoinExplorer said:

Did you see where someone dropped a dime on two women trying to smuggle 20 kg of gold through Cochin International Airport from Dubai? They had special jackets with pouches to hold the gold bars underneath burqas. $939,000 in gold, and they got busted.

They've only seized 23 kg of gold total at that airport in the last 6 months, so this shows things are really ramping up. Also, the profit if they'd gotten away with it would have been $97,000. (Profit for the smuggling ring that is, they were just mules.)
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http://newindianexpress.com/cities/...r-gold-seizure/2013/09/20/article1793912.ece1

Here's a link if anyone is interested. CCP

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