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Budget 2024: What commodity markets want from finance minister Nirmala Sitharaman
As the clock ticks down to the presentation of the interim budget, various sectors of the Indian economy are holding their breath, and the commodities market is no exception. In the gold sector, industry stakeholders are seeking a reduction in the import duty on gold from 15% to 10%. The gold sector is also seeking special benefits, such as a 0.5% duty reduction for imports through the India International Bullion Exchange (IIBX).
As the clock ticks down to the presentation of the interim budget, various sectors of the Indian economy are holding their breath, and the commodities market is no exception. Market participants within this sphere are closely monitoring developments, eager to see how the government's fiscal policies will impact their operations.
In the gold sector, industry stakeholders are seeking a reduction in the import duty on gold from 15% to 10%.
Surendra Mehta, Secretary of the Indian Bullion and Jewellers Association (IBJA), emphasized the opportune moment for a cut in the import duty on gold. He stated, “If you look at the current account deficit, it is far better than what it was earlier. So that means the government has excess foreign reserve, and this would be the right time to cut the import duty on gold.”
The gold sector is also seeking special benefits, such as a 0.5% duty reduction for imports through the India International Bullion Exchange (IIBX). Industry leaders believe that these measures could further boost the gold market and contribute to economic growth.
In addition to import duty reduction, the gold sector hopes for more consumer-friendly policies. This includes permitting monthly instalments for gold purchases and removing the capital gains tax on jewellery sales.
As the interim budget approaches, stakeholders in the commodities market remain cautiously optimistic. Vipul Shah, Chairman of the Gem and Jewellery Export Promotion Council (GJEPC), acknowledged the limitations of an interim budget but expressed hope that the government would consider their proposals.
He said, “We are not having high expectations from the budget as it is going to be an interim budget. However, we have asked for a reduction in gold import duty from 15% to 5%, and we have asked for relaxation of sales from special notified zones.”
Somasundaram PR, Managing Director of the World Gold Council, highlighted the potential for a significant jump in gold demand. He suggested that the current high prices might have softened demand in terms of quantity, but a policy shift could trigger a surge in demand in the coming years.
One of the other demands from participants in the commodities market is the abolition of the commodities transaction tax (CTT) and the opening of the market to Non-Resident Indians (NRIs).
Participants are also advocating for the unification of commodities under a single regulator. A unified regulatory framework could streamline oversight and bring about greater efficiency and transparency in the market.
Additionally, there is a call to replace the current goods and services tax (GST) for commodities with an integrated GST, a move that could simplify taxation processes.
Watch accompanying video for entire discussion.
(Edited by : Pihu Yadav)
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