By Malvika Gurung
Investing.com -- The basic import duty on gold has been hiked sharply by 5% to 12.5% from 7.5%, as per a government notification on Friday, in efforts to put a check on imports as the Indian rupee slumped to a new all-time low against the US dollar today at 79.11.
The domestic currency has been sliding against the greenback and recorded multiple fresh lows in June.
Most of India’s gold demand is met through imports, exerting pressure on the rupee, and is the second-largest importer of yellow metal worldwide.
In May 2022,, official imports of the yellow metal stood at 98 tonnes, significantly higher than 27.1 tonnes in April (2022) and 11.4 tonnes in May 2021.
Market experts believe that a 5% spike in import duty will shoot the prices of gold in the local market. Gold rates surged 2.33% to Rs 51,901/10g on MCX at 10:35 am.
Earlier this year, leading jewellers in India requested the Government to reduce the import duty on gold from 7.5% to 4% to keep a check on the smuggling of gold.
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