Nepal import duty hike may prevent silver smuggling to India

Nepal’s decision to increase silver import duty is expected to halt silver smuggling to India, analysts said.

At present, silver was much cheaper in Nepal than in India and that prompted illegal trade between borders, they added.

Nepal Gold and Silver Dealers’ Association has already raised an alarm regarding the smuggling of silver to India rather than gold as the precious yellow metal was relatively more expensive in India than in Nepal.

Association said if the customs duty was not revised, then once again silver would have been smuggled to India like it was two years back.

Nepal government also acknowledged the fact that smuggling of imported precious metals to India as they were relatively cheaper in Nepal due to difference in customs.

The Himalayan nation prohibited traders from importing gold and silver, allowing only commercial banks to do so, as a measure to tackle the heavy deficit in the balance of payments.

Following the strict measure, imports of gold and silver went down remarkably and in the last fiscal year imports of gold and silver accounted for only three per cent of the total imports.

Fiscal year 2009-10 showed a huge deficit in Balance of Payment account due to huge imports of gold and silver. Imports of gold and silver had accounted for 10 per cent of total imports.

Ministry of Commerce and Supplies has opened silver imports through open general lice-nse without any quota. But only commercial banks can import 15 kg gold per day. – BullionStreet

Tags: Nepal silver import duty

Posted by Silver Guru on Feb 8 2012. Filed under Silver Analysis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry