According to a senior World Gold Council (WGC) official, India’s move to lower its import duties on gold from 15% to 6% will aid in the decrease of the smuggling of the precious metal and its jewellery into the second-largest gold consumer market in the world.
India’s reduction in the import duty on gold does, according to Andrew Naylor, Head of Middle East and Public Policy at the WGC, “reduce opportunity to arbitrage and incentives to bypass customs duty.”
We have continuously maintained that smuggling is a result of excessive duties, not just in India but globally as well. Therefore, any drop in that rate, along with process simplification, ought to lessen the motivation for smuggling, Naylor stated in an interview with Khaleej Times.
Indian Finance Minister Nirmala Sitharaman declared last month that the Union Budget 2024–25 would lower the overall import duty on gold from 15% to 6%. UAE dealers of gold and jewellery claimed that even with the import duty cut by New Delhi, the price of precious metal remains lower in Dubai.
Dubai, dubbed the “City of Gold,” is India’s main trading partner for gold. In addition to being a hub for wholesale trade, Dubai is a popular destination for Indian travellers looking to purchase jewellery made of precious metals.
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