While presenting the Union Budget 2024, Finance Minister Nirmala Sitharaman announced to reduce custom duty on silver and gold to 6% from 15%. She has also proposed reducing customs duty on platinum to 6.4% from 15.4%.
“To enhance domestic value addition in gold and precious metal jewellery in the country, I propose to reduce customs duties on gold and silver to 6% and platinum to 6.4%,” said Nirmala Sitharaman in her budget speech.
One of the main demands of the gem and jewellery industry has been the removal of customs duties on silver, gold, and platinum. Whereas, analysts believe that this move will likely lower down domestic prices for gold and silver, while boosting demand for these precious metals in India.
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Increased demand for gold from India could also raise global prices, which hit a record high earlier this year. However, it could also enlarge India’s trade deficit and add pressure on the already struggling rupee.
Times of India reported Alok Sonkia, president of jewellers association as saying that smuggling incidents will now be reduced. The industry was suffering a negative reputation due to this issue. Reducing customs duty was an important step by the Finance Minister to address this problem.
According to the World Gold Council (WGC), gold demand in India surged by 8%, reaching 136.6 tonnes in the first quarter of 2024. This increase was driven by a strong economy, despite gold prices hitting record highs. Additionally, the Reserve Bank of India (RBI) bought over 19 tonnes of gold during this period.
Gold and Jewellery Stocks Surge After Customs Duty Cut
Shares of gold and jewellery retailers surged on Tuesday after Finance Minister Nirmala Sitharaman announced a reduction in customs duty on precious metals.
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On the Bombay Stock Exchange (BSE), Senco Gold’s stock rose by 6.16% to Rs 1,000.80 per share. Rajesh Exports saw a 5.49% increase to Rs 313.90, and PC Jeweller jumped 5% to Rs 74.16, reaching its upper circuit limit.
Titan Company’s shares went up by 3.66% to Rs 3,371.65 per share. Tribhovandas Bhimji Zaveri climbed 2.79% to Rs 140.20, and Kalyan Jewellers India gained 1.54%, closing at Rs 537.05 per share.
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