Budget 2025: Increase in import duty on gold in budget may affect business, WGC expressed apprehension in report
New Delhi| The government’s decision to reduce import duty on gold last July has had a significant positive impact on the industry and any increase in tariffs in the upcoming budget could adversely impact business. The World Gold Council (WGC) has expressed this apprehension.
“Any increase in import duties in the upcoming budget could have an adverse impact, which is expected to increase smuggling, increase domestic gold prices and push back the industry”, said Sachin Jain, India’s regional CEO of WGC, requesting not to increase import duties on precious metal ahead of the 2025-26 budget
In a pre-budget note, Jain said, “It is important that all stakeholders including government bodies, industry people and financial institutions cooperate to maintain the positive momentum of the market”. By fostering a synergistic environment, we can ensure that the gold industry continues to flourish, innovate and contribute significantly to India’s economic growth and prosperity
Jain said that like the last decade, they are expecting progressive, people-friendly and industry-supporting announcements in the budget. The gold industry contributes an estimated 1.3 percent to India’s GDP and employs about 20 to 3 million people. Customs duty on gold was reduced from 15 per cent to 6 per cent in Budget 2024, presented in July.
The WGC claims that the reduction in customs duties has helped to reduce informal imports, stabilize official channels and encourage domestic purchases of gold. The reduction in taxes on gold has led to a more organized and transparent industry, strengthening the market.
The budget session of Parliament will begin on 31 January and end on 4 April as scheduled. The Union Budget 2025, will be presented on 1 February. Before that, the Economic Survey for the fiscal year 2024-25 will be presented on January 31. All eyes will be on major announcements and far-reaching economic plans for the remainder of the Modi 3.0 term. This budget is being presented amid weak GDP figures and slowdown in consumption in the economy.
