SMM7, 8th March: Indian Finance Minister Nirmala Sitharaman said on Friday that India has raised import tariffs on precious metals such as gold from 10 per cent to 12.5 per cent.
But the Indian Jewelry Industry Association has asked the Indian government to lower tariffs on gold imports, which have led to a surge in smuggling.
India is now buying large amounts of gold to diversify its foreign exchange reserves, and the Reserve Bank of India is likely to increase its gold reserves by 1.9 million ounces this year, a record for the Reserve Bank of India.
Capital Economics Ltd's Ross Strachan said the central bank's move represented a consensus in developing countries to reduce the dollar's share of the country's foreign exchange reserves. The amount of gold bought by the Reserve Bank of India will not be large, but the trend is likely to continue for years to diversify its foreign exchange reserves over the long term.