India has raised import taxes on gold, silver, and other precious metals to 15% from 6% in an effort to reduce non-essential imports and protect the country’s foreign exchange reserves amid growing geopolitical uncertainty and rising global bullion prices.
The updated tariff structure, which went into effect at midnight on Wednesday, includes a 10% basic customs charge and a 5% Agriculture Infrastructure and Development Cess (AIDC), according to a notification published by the Central Board of Indirect Taxes and Customs.
The decision comes amid growing government concerns over India’s rising gold import bill and its impact on the external account at a time of high oil costs and global instability caused by the Middle East conflict.
Prime Minister Narendra Modi recently urged residents to put off purchasing gold for at least a year and instead invest their resources in productive financial assets and nation-building projects. Officials saw the appeal as part of a larger attempt to relieve pressure on foreign exchange reserves and eliminate unnecessary purchases amid a moment of increased global volatility.
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