Gold Market Waiting For India To Reduce Gold Tariffs

Mumbai-India (Feb 23)  The deadline for the Indian government to present its annual budget is quickly approaching and, at the same time, it is expected the government will also announce a reduction in gold tariffs. Ministers within the government itself have been calling for tariffs to be reduced to 2% from 10%.

Analysts from Barclays say the government’s move to lift restrictions on gold imports bodes well for a reduction on duty fees. However, they add that the industry has to go through a high level of stock piles before imports rise significantly. “In our view, it is unclear whether a reduction in duty will lead to an immediate rise in imports, but it is likely to support interest in the coming months, particularly when seasonal buying resumes in April, and particularly if the cut is of a meaningful magnitude,” they say.

Analysts also say the government could deter gold smuggling by cutting the duty fees in half to 5%.

Source: KitcoNews