Starting August 1, gold prices are expected to decrease by 9% as the government implements a reduction in import duties. This follows the Union Budget 2024 announcement, which saw a cut in the import duty on gold. With all customs formalities now completed, cheaper gold is anticipated to hit the market from Thursday. The reduction in import duty is expected to make gold more affordable for consumers.
During the union budget presentation on July 23, Finance Minister Nirmala Sitharaman announced a reduction in the import duty on gold from 15% to 6%. While the impact of this duty cut was immediately evident in the market, it took some time for the lower-cost gold to be imported due to necessary customs procedures. With these formalities now completed, it is expected that gold subject to the revised import duty will begin arriving in India and be available for retail sale starting August 1.
Yogesh Singhal, Chairman of the All Bullion and Jewellers Association, stated that the completion of customs formalities took about a week. Starting August 1, gold subject to the reduced import duty will begin arriving in the country, which is expected to impact retail gold prices. With a 9% reduction in import duty, consumers can anticipate gold becoming approximately Rs 5,000 to 6,000 rupees cheaper per 10 grams.
Yogesh Singhal noted that the reduction in import duty is expected to impact the black market for gold as well. Jewellers will no longer be able to charge a premium on gold, which had previously been as high as 15% due to illicit import practices. With the duty reduction, these practices will be curtailed, preventing jewellers from imposing additional charges on customers.
Gold Prices Drop by Rs 4,000 Since July 22
The impact of the reduced import duty on gold has been evident since the union budget announcement. According to the Indian Bullion and Jewellers Association (IBJA), the price of 24-carat gold was Rs 73,218 per 10 grams on July 22, just before the budget was presented. As of August 31, the price has decreased to Rs 69,309 per 10 grams. This represents a reduction of Rs 3,909 per 10 grams in the retail price of gold since the budget announcement.