Gold Duty Reduction to Curb Smuggling and Boost Gem Exports: CBIC Chairman Malhotra

CBIC Chairman Sanjay Kumar Malhotra stated that the reduction in the import duty on gold from 15% to 6% will help curb smuggling and enhance India's exports of gems and jewellery. The previous high duty, enforced due to a worsening current account deficit, had led to increased smuggling and alternative import methods. The new duty is expected to improve the employment and export sectors.

CBIC Chairman Sanjay Kumar Malhotra announced on Wednesday that the government's decision to significantly cut the import duty on gold from 15% to 6% aims to contain smuggling and boost the country's gem and jewellery exports.

In the previous financial year, customs and DRI seizures of smuggled gold surged to 4.8 tonnes, up from 3.5 tonnes in 2022-23. The duty spike, introduced in July 2022, was aimed at controlling a worsening current account deficit, which was 2% of GDP in 2022-23 but has since improved to 0.7% and was a surplus in the March quarter.

Malhotra emphasized that lower duty rates could prevent capital blockage in jewellery manufacturing, benefiting a sector that employs nearly 50 lakh people and significantly contributes to exports. The previous high duty fostered smuggling and usage of free trade agreements to import gold in non-bullion forms. With the new budget proposal, the duty cut aligns with rates on other precious metals, addressing demands from the gems and jewellery industry for lower tariffs to boost exports and manufacturing.