Expressing optimism over measures announced in union budget 2021, credit rating agency, India Ratings and Research (Ind-Ra) has said that government’s proposal to reduce the customs duty on gold and silver to 7.5% from 12.5% will make the illegal trade of gold imports less attractive and curtail the increasing trend of gold smuggling in India.
As per the report, the move will also improve the government’s overall revenue from the sector. The duty reduction will support sectoral demand in the long term, as jewellery costs will come down and customers’ purchasing power will improve.
Ind-Ra also noted that along with the reduction in import duty on gold/silver, the government announced an increase in the custom duty from 7.5% to 15% on imported cut and polished cubic zirconia and synthetic cut and polished stone. This could aid local manufacturing of these items by making jewellery manufacturing more competitive.