Budget 2024: Gold Price In India Falls Further After Reduction In Customs Duty

Nirmala Sitharama while presenting her 7th consecutive union budget 2024 on Tuesday announced reduction in customs duty on gold and silver to 6%. The FM also announced exemption of custom duty for 25 critical minerals including lithium, copper, cobalt, etc. The move soon impacted gold prices India as gold prices slipped further in the country. 22k gold price India slipped by Rs 250 to Rs 67,450/10 grams and 100 grams of 22 carat yellow metal prices declined by Rs 2500 to Rs 6,74,500. 24k gold prices today slipped by Rs 270 to Rs 73,580/10 grams and 100 grams of 24 carat precious metal prices slipped by Rs 2700 to Rs 7,35,800.

18k gold prices today slipped by Rs 200 to Rs 55,190/10 grams and 100 grams of 18 carat yellow metal prices today declined by Rs 2000 to Rs 5,51,900.

After reduction in customs duty on gold, silver prices, Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL) said, "The finance minister has made a big announcement regarding the reduction in Gold and Silver customs duty from 15% to 6%. BCD (Basic Customs Duty) is reduced from 10% to 5% and AIDC (Agriculture Infrastructure and Development Cess) is reduced from 5% to 1%. 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. Bullion market participants were expecting a 5% cut in duties, but FM has announced a 9% cut, which is a commendable step from the government. Indian consumers would be able to buy now at a 9% cheaper rate from today, so it will boost physical demand. MCX Gold prices have fallen by Rs 4000 from Rs 73000 to Rs 69000 as a knee-jerk reaction after this announcement and are expected to fall more up to around Rs 67000/ 10 gm as per international pegged price."

Earlier in morning today, 22k gold prices declined marginally by Rs 10 to settle at Rs 67,690/10 grams and 100 grams of 22 carat yellow metal prices today fell by Rs 100 to Rs 6,76,900. 24k gold prices today slipped by Rs 10 to Rs 73,840/10 grams and 100 grams of 24 carat precious metal prices today dived by Rs 100 to Rs 7,38,400.

18k gold prices today fell by Rs 10 to Rs 55,380/10 grams and 100 grams of 18 carat yellow metal prices today slipped by Rs 100 to Rs 5,53,800.

Cheering the decline in customs duty on gold and silver, Saiyam Mehra, Chairman, All India Gem & Jewellery Domestic Council said, "The reduction in the basic customs duty on gold and silver to 6% and on platinum to 6.4% is a commendable move by the government. This was a long-standing demand from the All India Gems & Jewellery Domestic Council, which represents the entire gems and jewellery industry. The customs duty reduction will benefit domestic jewellery manufacturers, especially small and medium enterprises, encouraging them to transition gradually to the formal channel. Additionally, the Finance Minister has also increased the scope of working capital loans to SMEs and MSMEs, which will help these units expand their businesses in the future. The extension of the direct benefit transfer scheme to the manufacturing sector, with separate salary and Employees' Provident Fund transfers directly to the accounts of employers and employees, is a wonderful move. This will accelerate employment generation in India. Overall, this budget has focused on 9 key priorities of Viksit Bharat and we are proud to witness it."

On the decline in customs duty on yellow metal and silver, Rajesh Rokde, Vice Chairman, All India Gem & Jewellery Domestic Council said, "We admire Finance Minister Nirmala Sitharaman ji's Union Budget presented today, which stands out in several ways. Notably, after persistent efforts from GJC, the government has reduced customs duties on gold and silver to 6 % and on platinum to 6.4%. This move will provide significant relief to consumers who have been investing in alternative assets, encouraging them to return to gold investments. We are confident that household investment and savings in India will see an increase in the coming days. Additionally, the expansion of working capital loans for SMEs and MSMEs in the jewelry sector will provide a much-needed boost. The increase in the personal income tax exemption limit will also benefit consumers and promote household savings. Overall, the Union Budget 2024 is commendable."

Silver prices in India today declined as well. If you are looking to buy 1 kg silver in India today, you need to shell out Rs 91,100/kg as prices declined by Rs 400. 100 grams silver prices in India today turned cheaper by Rs 40 to Rs 9,110.

Commenting on pre-budget expectations from the gold and commodity market, Mr. Sachin Kothari, Director Of Augmont - Gold For All said, "changes in import duty are the top priority. The market expects an Import duty cut in Gold from 15% to 10% and for Silver import duty to be at par with Gold under CEPA. Some refineries in India have been importing unrefined gold (gold dore) from LDCs under zero duty, so stopping Import Duty benefits from LDC and FTA countries is expected as it distorts a level playing field."

With IIBX at GIFT city emerging as a gateway to import bullion, bullion players want all import and export of gold to happen through IIBX. A special benefit of 0.5% should be given for importing gold. Market participants also like the setting of a Jewellery Export Center at GIFT City for domestic smaller traders, added Sachin Kothari.
Since the Gems and Jewellery market is regulated by SEBI, RBI, DGFT, Ministry of Finance, Ministry of Commerce, etc, market players want a single regulator in this market and also 100% bullion trade to be moved through Commodity Exchanges, emphasized Sachin Kothari.

Earlier, as per industry experts, the gold industry wanted government to bring down the import duty on yellow metal from 15% to 10%.