World
India
In a move that has caught the attention of both domestic and international markets, the Indian government has reduced the base import prices for gold and silver. The price for gold has been cut by $11 per 10 grams, bringing it down to $927 per 10 grams, while silver sees a reduction of $18 per kilogram, now priced at $1,025 per kilogram. These revisions are part of the government’s regular, fortnightly updates based on market trends, including fluctuations in the dollar index and other global dynamics.
What Does This Price Change Mean?
The import tariff price for gold is the base price set by the government, used to calculate the import duties on gold entering the country. This adjustment follows a period of selling pressure on gold, driven by a rebound in the dollar index and ongoing profit-taking. These changes reflect India’s response to global market conditions, with the aim to regulate the inflow of precious metals and control price volatility.
Alongside gold, silver has also seen a price cut. The reduction of $18 per kilogram in the import tariff price marks the second revision for silver in recent weeks. Just last month, the government had raised the base price of silver by $42 per kilogram. These adjustments are part of the government’s efforts to keep the import duty framework in line with global price movements.
Fortnightly Reviews and Market Influence
The Indian government reviews and updates the import tariff prices for both gold and silver every fortnight. These updates are essential for calculating the duties imposed on imports and ensuring that they are aligned with current market conditions. India, as the world’s largest importer of silver and the second-largest importer and consumer of gold, plays a crucial role in the global precious metal market. The government’s import policy decisions are closely watched by traders, investors, and analysts alike.
Impact on India’s Gold Imports
India’s gold imports are expected to decline significantly in February 2025. According to Reuters, the country’s gold imports could drop to around 15 metric tons, the lowest for the month in at least two decades. This represents a sharp fall from 103 tons in February 2024, indicating a trend of reduced demand for gold imports in India, influenced by high domestic gold prices and global market volatility.
These price revisions signal the Indian government’s efforts to keep gold and silver imports in check, while responding to global market forces like the dollar index and shifting investor sentiment. The reductions in gold and silver import tariffs are likely to have a ripple effect on global prices, with India’s import policies continuing to shape market trends.
