Import Duty on Gold doubled .

Citing heavy gold imports as a major reason for the high current account deficit, the Finance Minister decided to double the import duty on gold from 2% to 4%. Increase in levy is likely to discourage imports and impact the jewellery demand in domestic markets. It may be noted that recently government had changed the duty structure on gold imports.  The levy was now linked to the value rather than the quantum of bullion that was being imported. This had already led to an implicit rise in the duty on gold imports. And within a span of one month, the government has further proposed to increase the duty to 4%. Considering that India is the biggest importer of gold this would significantly impact the demand and may also give rise to illegal trafficking.