21-Jan (Bloomberg) — India, the world’s largest bullion buyer, raised taxes on gold imports to curb a record current- account deficit and moderate demand for the precious metals that’s rallied for 12 straight years.
The duty on gold and platinum imports will rise to 6 percent immediately from 4 percent, Economic Affairs Secretary Arvind Mayaram told reporters in New Delhi today. The tariffs will be reviewed if imports moderate, he said.
Increased taxes may reduce gold demand in Asia’s third- largest economy, threatening prices that rallied 7.1 percent in 2012 as investors held record amounts in exchange-traded products and central banks stepped up purchases. About 80 percent of India’s current-account deficit is attributable to gold imports, according to the Reserve Bank of India. The rupee lost 3.5 percent last year, falling to a record low of 57.3275 against the dollar as bullion imports widened the current account to an all-time high.
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