See the highest import tax

Taxation instruments are a tool for the government to guide the development of the industry in the hands of the government. The Indian government has once again used this tool to increase the gold import tariff from 7.5 % to 12.5 % record high. The move aims to curb gold imports, but before imports were curbed, the gold price in India has risen rapidly after the tax rate raised.

Text | China Gold News special commentator Kong Linglong

This article is an original article of China Gold Network. The content is for reference only, and does not constitute operating suggestions or investment guidelines.

Each adjustment of gold tariffs is related to India's regular project deficit. In the first half of this year, the Indian trade situation deteriorated due to high energy prices and depends on energy imports. Although India imports discount crude oil from Russia, exports have increased year -on -year. However, the trade deficit in May is still increasing.

According to data from Indian Customs, India exported US $ 38.94 billion in May, an increase of 20.55 % year -on -year, and imports reached US $ 63.22 billion, an increase of 62.83 % year -on -year. This means that India's trade deficit expanded from US $ 6.53 billion a year ago to US $ 24.29 billion, an increase of nearly three times.

Crude oil is the blood of the economy. Before finding alternative energy, it must not be imported a few barrels less. Therefore, the relatively strong gold that is not so rigid and not so strong will become a "soft persimmon" that can be handled by tariffs. After all, gold is the second largest imported item in India after crude oil, and gold contributions to the rising in May: Indian gold imports that month rose sharply from US $ 678 million a year ago to $ 6 billion.

The Indian government hopes to increase gold import tariffs to reduce gold imports. After all, it is necessary to spend precious foreign exchange on the blade. This is also a measure to defend the Indian currency rupee. India meets most of its golden demand by imports, but insufficient US dollar has put pressure on rupees. After the exchange rate of the U.S. dollar against the US dollar in the second quarter fell by more than 4 %, the exchange rate of the rupee against the US dollar has recently reached a record low and fell to nearly 80 rupees to redeem $ 1.

In order to defend the rupees, the Indian Bank of India is also increasing gold. The Indian central bank increased 3.7 tons of gold in May, increasing its total gold reserves to 765.1 tons. The increase in holdings in May is the highest monthly increase since the Central Bank of India since December 2021. After increasing tariffs, the cost of increased holding of gold reserves has also been increased.

Also improved the cost of curbing gold smuggling. In fact, India's import tariffs had been maintained at 12.5 % for a long time, and it was gradually decreasing only more than a year ago. At that time, India wanted to reduce smuggling by reducing tax rates. With the stimulation of double -digit profits, many people took risks and smuggled gold to India through various means such as land and aviation.

The World Gold Association is expected to be smuggled into India with 150 tons to 200 tons of gold each year. It is unknown to how much the tariffs were reduced to how much the tariffs were reduced by the time. It has caused certain restrictions on the flow of multinational personnel, and the amount of gold smuggling is indeed decreased. At present, the tax rate of India's return to history, coupled with the gradual recovery of multinational flow, has given enough stimulation of smuggling gold.

Reunited import tax will delay the recovery of the Indian gold jewelry market. However, in the eyes of the Indian government, it is not a big deal to bring a bunch of gold necklaces than saving the disadvantaged rupee.

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