April Fool’s Day 2012 marked the first day of increases in India’s precious metals import taxes. The additional levy went into effect after being doubled on January 17, 2012. For purchasers of silver, the news didn’t hit as hard, since this second round of increases did not affect silver imports.
India’s account deficit has been widening as bullion imports have reached record levels, while precious metals purchases have surged. As with most other global economies, Indian currency has simultaneously experienced record lows. In an effort to stabilize the Indian rupee, banks will also be required to submit reports to the Reserve Bank of India regarding valuation and holdings of precious metals.
The new tariffs are seen by many in India as “an attack on traditional Indian culture.” Criticism is coming from all quarters, including investors, dealers and Indian Parliament members. Surging precious metals prices may not only negatively impact jewelry and gold dealers, but are likely to dampen the traditional wedding season in India.
http://www.goldmoney.com/gold-reasearch/roman-baudzus/indian-gold-taxes-hurting-traditional-culture.html
http://www.bloomberg.com/news/2012-03-16/india-raises-gold-import-tax-for-second-time-prices-drop-1-.html
