Indian Government Hikes Customs Duty to Curb CAD

Today, the Ministry of Finance (MoF) announced increased Basic Customs Duty (BCD) for certain ‘non-essential items’ which includes diamonds, lab-grown diamonds, colour gemstones and finished jewellery.

The move comes in the wake of falling value of rupee and increasing foreign exchange outgo so that the government can bring down the import of certain items. Overall, the BCD has been increased on 19 items. The MoF aims to narrow the Current Account Deficit (CAD). The CAD widened to 2.4 per cent of the GDP in the first quarter of 2018-19.

The changes in rates of BCD will be effective from midnight.

Details of Customs Duty in India increased from 5 per cent to 7.5 per cent are the following:

1. Lab Grown Diamonds
2. Diamonds Semi Processed, Half cut or broken
3. Cut and Polished Colour Gemstones

Details of Customs Duty in India increased from 15 per cent to 20 per cent are the following:

1. Finished Jewellery