Increasing the import duty on gold alone will not help bridge the trade deficit, Commerce Minister Anand Sharma said on Wednesday, even as the Finance Ministry and the Reserve Bank of India have been taking steps to discourage imports of the precious metal.
“I don’t think increasing the import duty on gold will help bridge the trade deficit, as oil and gas import bills are much higher and with their international prices shooting up of late, it will only put more pressure on the trade gap front,” Mr. Sharma told reporters on the sidelines of a summit here.
“I don’t think there is trade account pressure that is substantially getting altered only due to gold imports,” Mr. Sharma added.
However, the Minister said that high gold imports had been a matter of concern.
At about $60 billion, gold imports were the second largest component in the import bill last fiscal when inward shipments touched a record $489 billion while exports netted only $306 billion.
The government has increased the import duty on gold this fiscal as the current account deficit has hit a record high at 4.2 per cent in 2011-12 and a historic 5.4 per cent in the second quarter of this fiscal.