India’s yearly budget draft presented last week by Finance Minister Pranad Mukherjee has already been generating strong criticism from several luxury sectors, especially auto and jewellery.
In the new budget, the customs duty on standard gold would double, to 4 percent and on non-standard gold to 10 percent. Earlier this year, the government had raised the import duty on gold from 1 percent to 2 percent. This move is expected to impact gold buying. In 2011, India’s jewellery demand fell by 14 percent at 567,4 tonnes against 657,4 tonnes in 2010.