Why Gold Smuggling is High??? Tariff Hike and High Import Duty…

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Government wants to curb gold imports in order to cover-up its trade deficit/ current account deficit for stabilizing Rupee value. So import duty on gold is being maintained at 10%, excise duty is also imposed and custom tariffs are also increased.

Rupee value has still not improved as compared to US dollar. It may have proved effective to some extent in helping government to stop the trade deficit/ current account deficit from further widening.

But the developments are to be seen with a wider perspective and it should be analyzed that whether gold import has declined in real terms or only the official figures show such decline, but unofficial imports of gold in the form of smuggling and other incoming of gold via other illegal means have increased.

Although Government has introduced schemes like Gold Monetization Scheme where investing in gold has become easy like no issues of security and liquidity is also maintained through this scheme. This scheme has got good response also but it is also true that it is a matter of discussion whether people investing in this scheme have made their investment under compulsion. Through reliable sources it has been known that Bankers have tried to impose targets to the existing or new borrowers/clients to invest in this scheme.

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