Malabar Gold & Diamonds urges government to reduce gold import duty to curb smuggling

By

Isabelle Crossley

Published
Jan 18, 2023

Malabar Gold & Diamonds’ founder  MP Ahammed has called for a reduction in gold import duty in the upcoming government budget. Ahammed is confident this will reduce the appeal of smuggling the precious metal and help the industry to grow. 

As the Union Government prepares its budget for the 2024 financial year, numerous businesses and traders’ bodies in the jewellery industry are weighing in on how to give the sector a boost. Although the government has seen gold import duty as a revenue source, higher import rates make smuggling gold a greater threat, the Economic Times reported.  
 
“Liberalising imports will boost organic domestic jewellery retail business,” Malabar Gold & Diamonds’ founder and group chairman M P Ahammed told ET Bureau. “However, the government has various concerns to address such as the widening current account deficit and rupee depreciation. I think import duty reduction will act as a growth multiplier for the gems and jewellery industry as it will boost growth in jewellery exports and drive up organised jewellery retail sales, which will eventually boost government revenue collections. It is important to note that in countries like the US, UK, China, Singapore, Malaysia, and GCC countries, gold imports don’t attract any duty, thus disincentivising illegal transactions on gold.” 

Malabar Gold & Diamonds is one of India’s large scale fine jewellery brands with showrooms across the country. The Indian jewellery market has trended towards organisation and the pandemic and introduction of mandatory hallmarking on gold further accelerated this trend. 
 
“The domestic gold demand especially from rural India is robust and rationalising gold import duty and standardising domestic gold price will further increase consumption,” said Ahammed. “And it will have a multiplier effect in the economy- higher GST collection, more jobs, and increased household savings.”