The Indian government’s move to reduce the import duty on gold from 15 per cent to 6 per cent has reduced the smuggling of the precious metal into Kerala markets, the All Kerala Gold and Silver Merchants Association (AKGSMA) has said.
With the cases of smuggling coming down to a large extent, S Abdul Nasar, State treasurer of the association, said the gold trade has started booming, providing a revival for the gold jewellery market in Kerala.
Earlier, the profit from smuggling of one kg of gold was ₹9 lakh till last month and this has now come down to ₹3 lakh, prompting many carrier agents in the field to keep off from the illegal trade, Nasar said.
Drop in Gulf trading
There are reports of a drop in gold trading in Gulf countries because of the import duty cut in India, he said. Earlier, a carrier used to get ₹5,000 for smuggling one sovereign (8 gms) of gold to Kerala and this has come down to ₹1,000. He said imports can be minimised considerably if the gold holdings within households can be shifted to recycling. Besides, reducing the tax on gold from three to 0.5 per cent will help to curb parallel gold trade and enhance tax revenue, he said.