Budget: Hike in basic customs duty on silver to 10% to check imports

NEW DELHI: The government on Wednesday announced increasing the basic customs duty on silver, both in dore and semi-manufactured form, to 10 per cent in order to curb imports.

Currently, the basic customs duty on silver dore is 6.1 per cent, while on silver unwrought or semi-manufactured items it is 7.5 per cent.

In her Budget speech for the 2023-24 fiscal, finance minister Nirmala Sitharaman said customs duties on dore and bars of gold and platinum were increased earlier this fiscal.

"I now propose to increase the duties on articles made therefrom to enhance the duty differential. I also propose to increase the import duty on silver dore, bars and articles to align them with that on gold and platinum," she said.

The basic customs duty on both silver dore and simi-manufactured items will be increased to 10 per cent, as per the Budget document.

Commenting on the announcement, Founder and Managing Director of Kama Jewelry Colin Shah said that the hike in basic customs duty on articles made from gold bars and import duty on silver will lead to a rise in the final price of locally made jewellery and maybe challenging for local refineries.

He is also the former chairman of the Gem and Jewellery Export Promotion Council.

To encourage lab-grown diamonds, the government has scrapped the basic customs duty from the current 5 per cent.

Currently, India is the world's third-largest silver physical investment market after the US and Germany.

The country's silver imports touched a record high of 8,000 tonnes in 2022 on rise in jewellery consumption, as per the market data.