India Cuts Gold and Silver Import Duties to Boost Demand

India reduced import duties on gold and silver from 15% to 6% to stimulate retail demand and curb smuggling. This could potentially enhance global prices and strain the rupee. Finance Minister Nirmala Sitharaman also announced import duty exemptions for 25 critical minerals, including lithium, crucial for electric vehicle batteries.

India has slashed import duties on gold and silver to 6% from 15%, a measure that industry officials believe will boost retail demand and help curb smuggling in the world's second-largest bullion consumer.

Increased gold demand from India could elevate global prices, which have hit record highs this year, potentially increasing India's trade deficit and placing additional pressure on the weakening rupee. "To enhance domestic value addition in gold and precious metal jewellery, I propose to reduce customs duties on gold and silver to 6%," Finance Minister Nirmala Sitharaman stated in her budget speech on Tuesday.

Additionally, she announced an import duty exemption for 25 critical minerals, including lithium. India has been actively seeking to ensure a steady supply of lithium, a vital component for electric vehicle batteries.