India Changes Import Duty on Gold

India, the world's biggest consumer of bullion, has changed the import duty on gold to two percent of value from the earlier flat 300 rupees per 10 grams and that of silver to six percent of value from 1,500 rupees per kilogram, the government said.

The changes could nearly double duties on both metals.

Prices of gold on the Multi Commodity Exchange (MCX) rose after the duty hike with the February gold contract gaining as much as one percent to 27,760 rupees.

Silver for March delivery rose more than two percent at 53,361 rupees per kg.

Shares in jewellers slipped with Rajesh Exports (REXP.NS) losing nearly three percent after the announcement.

The duty change would translate to about 570 rupees per 10 grams for gold, which is priced internationally in dollars, said Prithiviraj Kothari, president of the Bombay Bullion Association. Silver import duty could equate to 3,000 rupees per kg at current prices, he added.

We could have done without this hike, said Rajesh Mehta, chairman of Rajesh Exports. He added that he thought it should be easily digested by the market.

The rupee's reaction was largely muted, traders said.