Nepal Slashes Customs Duty on Gold, Smuggling Concerns Loom

The Nepal government's decision to halve the customs duty on gold led to a significant price drop. The move aims to address smuggling issues arising from price disparities with India, where customs duties were also reduced. Illegal gold trade remains a concern due to the open border.

The price of gold plummeted by Rs 15,900 per tola following the Nepal government's move to slash customs duty by half.

The Federation of Nepal Gold and Silver Dealers Association announced the new price of Rs 151,300 per tola for Monday, a decrease from Rs 167,200 on Sunday.

The decision to reduce the customs duty from 20% to 10% was made during a Cabinet meeting, aiming to align with India's reduction from 15% to 6% and counteract smuggling.

The previous hike in customs duty to 20% in Nepal contributed to increased gold smuggling due to price incentives across the open border.

The Federation suggested stabilizing the situation by setting the duty at 8% to curtail illegal gold trade.

(With inputs from agencies.)