goldmoney.com / By Roman Baudzus / January 8, 2013
As if last year’s new regulations from the Indian government had not caused enough turmoil at the local gold markets, tomorrow the Ministry of Finance and the Reserve Bank of India (RBI) will be publishing new regulations aimed at raising gold import taxes to 6%. Gold dealers are appalled at these new measures and argue that the country’s gold market – the second largest in the world – is being unfairly scapegoated in response to weakness in the rupee and the large current account deficit. They and many economists argue that such measures are counterproductive, and show that the Indian government is still too wedded to the kind of market controls that became a hallmark of the country’s socialist economy following independence.
Last year the Indian government quadrupled its gold import taxes from 1% to 4%. This week it is expected to release new plans for raising the rate to 6%. In April last year the RBI instructed all Indian commercial banks to deliver biannual reports on the total volume and financial value of all gold imports by financial institutions, banks, gold trading agencies, import and export companies as well as specific gold and jewellery dealers.