The government of Nepal has reduced the price of gold by 15,900 rupees. This decision was made by the Nepalese government in light of India’s move. Earlier, in the budget presented in July, the Indian government had reduced the import duty on gold and silver from 15% to 6%, causing a reduction of nearly 6,000 rupees in the price of gold. Similarly, the Nepalese government has taken a similar step, resulting in a reduction of 16,000 rupees per tola (11.664 grams) in the price of gold.
In fact, the Nepalese government has reduced the customs duty on gold by 50%. After halving the customs duty, the price of yellow metal has dropped by 15,900 rupees per tola. According to the Federation of Nepal Gold and Silver Dealers Association, the price of hallmarked gold was set at 151,300 rupees per tola on Monday, compared to 167,200 rupees per tola on Sunday.
How much has the import duty been reduced?
The Nepalese government has reduced the customs duty on gold imports from 20% to 10%. Officials stated that this decision was made during the Cabinet meeting held last Thursday and was implemented from Monday. Earlier, India had reduced the customs duty on gold and silver from 15% to 6% through its budget. In contrast, Nepal had increased the customs duty on gold from 5% to 20% in the current financial year’s budget.
Steps to curb smuggling:
After India reduced the import duty, gold became more expensive in Nepal and cheaper in India, leading to an increase in gold smuggling. According to the Federation, the open border and imbalances in customs duties encourage illegal trade. To curb this trade, the Federation has suggested that the customs duty on gold be set at 8%. However, the government has approved it at 10%.
Gold Prices in India and Nepal
After the reduction in gold prices in Nepal, the prices there have become lower compared to India. In India, the price of 10 grams of gold is approximately 79,595 rupees. If we convert the price of gold in Nepal into Indian rupees, the current price is 151,300 rupees (94,366 Indian rupees) per tola. Based on this, the price of 10 grams of gold in Nepal would be around 80,930 Indian rupees.
This means that even after the price reduction in Nepal, gold is still more expensive there compared to India.