Union Budget, 2022: Gold Rates Can Be Cheaper As Budget Reduces Customs Duty

Gold rates in the Indian markets can be cheaper further as the Union Budget 2022-2023, reduces custom duty for the FY 2022-23. Union FM Nirmala Sitharaman announces today, "To reduce indirect cost for suppliers and work-contractors, the use of surety bonds as a substitute for bank guarantee will be made acceptable in government procurements. Business such as gold imports may also find this useful. IRDAI has given the framework for issue of surety bonds by insurance companies."

FM Sitharaman added that for giving a boost to the Gems and Jewellery sector, customs duty on cut and polished diamonds and gemstones is being reduced to 5%. Simply sawn diamond would attract nil customs duty. To facilitate the export of jewellery through e-commerce, a simplified regulatory framework shall be implemented by June this year. Additionally, to disincentivize the import of undervalued imitation jewellery, the customs duty on imitation jewellery is being prescribed in a manner that a duty of at least Rs. 400 per Kg is paid on its import. So, gold rates in India can be cheaper in this FY. However, Indian gold rates depend on international gold prices, as the country mostly imports gold from foreign markets.

In India, 22 carat gold rates are quoted at Rs. 44900/10 grams and 24 carat gold rates are quoted at Rs. 48980/10 grams today. Additionally, in the international market, gold markets have not gained significantly today. the Comex gold futures gained by 0.43% and were quoted at $1802.8/oz, till last traded. On the earlier day, Comex gold futures closed at $1795.00/oz. The spot gold prices were quoted at $1804.30/oz, gained by 0.37%, till last traded. The US dollar index in the spot market stood at 96.40, falling by 0.27%. However, in India, the MCX gold in February future quoted at Rs. 47,940/10 grams, gained by 0.65%, till last traded.