Days after Prime Minister Narendra Modi appealed to the nation to pause gold purchase for a year amidst the West Asia crisis, the Central government increased customs duties on imports of precious metals like gold and silver from 6% to 15%. The import duty on platinum has been raised from 6.4% to 15.4%.
“The policy measure aimed at safeguarding macroeconomic stability, conserving foreign exchange, and moderating non-essential imports during a period of heightened global uncertainty arising from the ongoing West Asia crisis,” Hindustan Times quoted a government official privy to the development.
Since India is a major importer of crude oil, the country remains vulnerable to increased energy prices and supply chain disruptions. While the situation is already volatile, a resumption of war between Iran and the US would further exacerbate the crisis. This could inflate India’s import bill, impact domestic inflation and the current account deficit (CAD). In this wake, the Central government is taking measures to manage India’s external sector.
