Author: Paul Ploumis30 Jun 2014 Last updated at 08:47:30 GMT
NEW DELHI (Scrap Monster): The newly elected government in India is likely to announce cut of 2% in gold import duty during their maiden Budget which is scheduled to be presented on July 10th, says leading US brokerage house Bank of America Merril Lynch.
In the report released yesterday, BofA states that Indian government will ultimately have to withdraw the gold import curbs as local jewellers run out of inventory. As a first step to this effect, the government may reduce the import duties from 12% to 10% during Budget presentation. As per the report, the spike in gold import demand would widen the current account deficit to 2.6% of the GDP in FY ’15 from 1.7% in FY ’14. Also, the net gold imports will increase to $40 million in FY ’15 from $28.8 million in FY ’14.
The industry hopes the government to make industry-friendly announcements during the forthcoming budget. The gold industry in the country has urged for reversal of import duty on gold and reversal of RBI’s 80:20 rule. However, the Finance Minister had declined to provide any assurance on reversal of the controversial 80:20 rule. Meanwhile, a section of jewellers in the country has threatened to shut stores if 80:20 rule is not relooked by the government.