India hiked the import duty on gold yet again to a record 10% from earlier 8% and also raised excise duty on the metal, after Indians bought more in July despite attempts to strangle supply and curb demand as the government tries to rein in dollar spending.
The government also raised the import duty on silver to 10% from the earlier 6%, and the factory gate duty on gold bars to 9% from 7%.
Gold is India’s biggest luxury import and helped swell the current account deficit to an all-time high in 2012/13. A series of tax hikes and constraints on supplies appeared to stem demand and imports fell in June to $2.45 billion.
India is a major importer and consumer of gold and silver.