The Finance Ministry has raised the import duty on gold and silver jewellery to 15 per cent in a move to protect the domestic industry and curb the precious metal’s imports, a main fuel for the soaring trade and current account deficits.
The Government last revised the levy in January 2012, when the import duty was set at 8 per cent for gold jewellery and 4 per cent for silver jewellery.
With the latest hike, there is no duty differential between bullion and jewellery.
Last month, the Finance Ministry had raised the import duty on gold, silver and platinum to curb imports. Duty on primary gold and platinum was raised to 10 per cent from 8 per cent, and on primary silver to 10 per cent from 6 per cent. The duty hike had an impact, with gold imports coming down to worth $650 million in August against $2.20 billion in July.
Jewellers had feared that cheaper imports will hit local manufacturing, and threaten the livelihood of some 10 million artisans.
According to PTI, India imported gold jewellery worth $5.04 billion in 2012-13. For the April-June quarter of 2013-14,, imports totalled $112 million.
In the absence of any duty differential between jewellery and the primary metal, Indian manufacturers will not be able to compete with cheaper imports, especially as most of the imported jewellery is machine-made compared to handmade Indian jewellery.