Finance Minister Nirmala Sitharaman announced a significant reduction in basic customs duties on gold, silver, and platinum, as part of the Union Budget 2024-25.

The customs duty on gold and silver will be reduced to 6%, while the duty on platinum will be lowered to 6.4%.

This decision addresses a longstanding demand of the gems and jewelry industry and aims to make these metals more affordable.

In her Budget 2024 speech, Sitharaman stated, “To enhance domestic value addition in gold and precious metal jewellery in the country, I propose to reduce customs duties on gold and silver to 6 per cent and that on platinum to 6.4 per cent.” This move is expected to boost consumer spending and support the jewelry sector.

Jateen Trivedi, VP Research Analyst at LKP Securities, emphasised the immediate market impact of the customs duty reduction.

“In the Budget, the Finance Minister announced a reduction on Basic Custom Duty on gold and silver from 10% to 6%. Adding 5% AIDC, which remains unchanged, the total import duty on gold and silver is reduced from 15% to 11% now. As a result, the price of gold reacted lower in MCX by more than ₹2,000 to ₹70,350 per 10 grams, and silver by ₹2,500 to ₹86,600 per 10 grams as the market prices in the lower import duty gap of 4%,” he explained.

Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL) said, “This announcement is a welcome step for the bullion industry, as bullion market participants have been waiting for this duty cut for a long time,”

He noted that Indian consumers would now be able to buy gold and silver at a 9% cheaper rate, boosting physical demand.

Overall, the reduction in customs duties on precious metals is seen as a positive development for the gems and jewelry industry, promising increased consumer demand and market stability.