Besides containing import of gold, the proposed hike in jewellery duty seeks to provide level playing field to domestic jewellery makers. (Agencies)
The government had last month hiked import duty on gold for the third time in 2013 to 10 percent. Duties for silver and platinum were also increased to 10 percent. Besides, customs duty on gold dore bars, ore or concentrate were raised to 8 percent from 6 percent.
Further, the RBI also restricted gold imports on a consignment basis by banks. Finance Minister P Chidambaram had earlier said that gold import would be contained below 845 tonnes shipped in last fiscal.
Gold imports in value terms fell to USD 650 million in August, from USD 2.2 billion in July. India is the largest importer of gold, which is mainly utilized to meet the demand of jewellery industry.
High gold import strained India's Current Account Deficit (CAD) which touched a high of 4.8 percent of GDP in the 2012-13 fiscal.
Besides containing import of gold, the proposed hike in jewellery duty seeks to provide level playing field to domestic jewellery makers.