India is considering cutting its 15% import duty on gold and silver after the higher rate failed to curb imports as much as expected and, according to local sources, has also encouraged unofficial trade.
India is one of the world’s most important physical precious metals markets. Changes in the cost of bringing metal into the country can quickly affect official imports, local premiums, dealer activity, and physical metal flows.
A lower duty could make official imports more competitive again.
High tariffs do not necessarily eliminate demand for gold or silver. They can simply change how that demand is supplied.
If the government ultimately cuts the duty, more metal could move back through official channels and reported import volumes could rise.
No decision has been made yet.
For anyone following the physical gold and silver market, India’s next move on import duties will be worth watching.
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