The economic logic of making gold pricier
- To protect the value of rupee against US dollar and curb trade deficit, gold import duty has been hiked
- Expectations are higher prices will cut gold demand, help control the demand for US dollars
The government has raised the effective import duty on gold to 15% from 10.75%. This has been done to support the Indian currency and shrink the trade deficit or the difference between imports and exports. One dollar was worth around ₹75.9 as of 1 April. It is currently worth around ₹79.