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India Slashes Gold Duty: Smuggling Dips, Imports Soar
26 May
Summary
- Gold import duty was reduced from 15% to 6%, the sharpest cut on record.
- Official gold imports surged 221% in August 2024 post duty reduction.
- Gold smuggling significantly decreased following the July 2024 duty cut.
India's government implemented a significant reduction in gold import duties, lowering the total customs duty from 15% to 6%. This substantial decrease, effective from July 24, 2024, represents the sharpest reduction on record and the lowest rate since June 2013. The move has had an immediate and dramatic impact on import volumes, with gold imports soaring by 221% in August 2024.
This surge in imports was driven by a convergence of increased festive season demand and restocking prompted by the duty cuts. Official bullion imports saw an overall rise of 8% in FY25, indicating a significant reduction in smuggling activities. Central Board of Indirect Taxes and Customs data corroborated this trend, showing a marked decrease in gold smuggling following the July 2024 duty revision.
