The government today reduced the import tariff value on gold and silver to $420 per 10 grams and $645 per kg, respectively, taking cues from firm global prices.

For the first fortnight of this month, the tariff value on imported gold stands at $426 per 10 grams, while that for silver at $650 per kg.

The import tariff value is the base price at which customs duty is determined to prevent under-invoicing. It is revised on a fortnightly basis considering volatile global prices.

The tariff value on imported gold and silver has been notified by the Central Board of Excise and Customs, an official statement said.

Gold in Singapore, which normally sets price trend on the domestic front, traded tad higher at $1,290.22 an ounce from $1,289.65 yesterday. Silver also advanced 0.3 per cent to $19.57 an ounce.

Similarly in domestic market, the extending gains for the second day, gold prices moved up by another Rs 70 to Rs 28,300 per 10 grams in the national capital today on increased buying by jewellers and retailers, driven by festive season demand coupled with firming global trend.

Silver also rose by Rs 150 to Rs 43,000 per kg on steady inflow of buying by industrial units and coin makers.

Gold is the second largest import item for India after petroleum. The government has imposed several restrictions to curb imports to contain current account deficit (CAD).

Recently, Commerce and Industry Minister Nirmala Sitharaman had pitched for relaxing gold import duty saying it was ‘badly’ hurting the gems and jewellery industry.

The curbs on gold imports may have had impact on CAD but “it has also brought back the horrible days of smuggling of gold,” she had said.

To reduce trade deficit, the government last year raised its gold import duty to a record 10 per cent and made it mandatory to export 20 per cent of the imported gold.