The central government has imposed new restrictions regarding the import of silver. The government has removed many categories of silver from the free list and put them in the restricted category. This means that importing these categories of silver will not be as easy as before and additional approval may be required.
This step of the government has been taken with the aim of controlling the increasing import of precious metals in the country and reducing the trade deficit. In the recent past, there has been increasing pressure on the import of gold and silver, due to which the concern about the impact on foreign exchange reserves has also increased.
Increasing trend of buying silver instead of gold
The government is also worried that after the increase in import duty on gold, people may now turn more towards silver for investment and jewellery. Keeping this possibility in mind, the government has also started imposing strict restrictions on the import of silver.
Recently the government had increased the import duty on both gold and silver from 6% to 15%. Despite this, it was feared that investors might increase the purchase of silver as it is a cheaper metal than gold.
Government’s emphasis on saving foreign exchange
The government is currently focusing on preserving foreign exchange reserves and reducing the increasing pressure on the rupee. The government seems cautious due to increasing uncertainties at the global level and increasing import bills.
Experts believe that if the import of precious metals continues to increase, it may increase both the current account deficit and trade deficit. This is why the government is now trying to handle the situation through control on imports.
Imports have already fallen
According to government data, the import of gold and silver has already reached its lowest level in almost 30 years in the month of April. High import duty and rising prices in the international market are being considered as the main reasons behind this. Now after the new restrictions, there may be a further decline in silver imports in the coming months.
