Govt weighing a cut in gold import duty

Indian officials are in discussions to cut a record high import duty on gold and relax rules on exports, government sources said, after the measures helped narrow the country's trade deficit and now threaten to encourage smuggling.

With three duty hikes last year to a record 10 per cent and onerous restrictions tying purchases to exports, official arrivals shrank almost 90 per cent in the six months to November, helping China displace India as the world's top gold buyer.

The decision to cut the import duty is likely to be taken anytime this month, said one of the government sources, who has direct knowledge of the deliberations but did not want to be named because of the sensitivity of the issue.