Government and Politics

As Gold Prices Go Up, Indian Government Raises Gold Import Tariff

golden background of defocused abstract lights

Escalating conflict and crisis in Iraq has caused the market value of gold to rise, prompting action from governments across the globe.

On June 16, the Indian Express reported that India’s government hiked the import tariff value of both gold and silver to $411 per 10 grams and $632 per kg, respectively. At the beginning of June, gold and silver’s respective import tariff values were $408 per 10 grams and silver at $617 per kg.

The import tariff value, or the base price at which customs duty is determined in an attempt to prevent under-invoicing — is revised every fortnight.

While the market value of gold fell by 28% last year, 2014 seems to be reversing this falling trend. Earlier this year, gold prices went up due to the long, brutal winter and tensions between Russia and Ukraine. Typically, the value of gold rises when there are international conflicts and a climate of unrest.

Increasing restrictions on inbound shipments of gold have caused gold imports to India to decline by 74% this year, the Indian Express reports. Gold is also India’s second-largest imported material, next to petroleum.

According to Barron’s, the price of gold might soon hit the $1,300-per-ounce mark, given a variety of factors that make the precious metal poised to potentially regain its value from when it hit all-time highs in 2011.

On June 19, Forbes magazine reported that ongoing concern about Iraq’s unrest will likely keep gold prices on the rise, as investors turn to it as a “safe haven” investment material.

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