Summary
1. Indian Govt. decided to increase duty on Gold bars,gold jewelery and Silver. 2. Duw to which affect can be seen in local market with the increase in Gold Rates. 3. It is expected that sales will going to affect in this time of recessions and low sales.
Analysis
Today Indian Finance Minister announces the budget for the period of 2009-2010. In which newly formed Indian Government Finance Minister has decided to increase the Import Duty on the import of Gold Bars, other gold import other then in form of Jewelery and on Silver too.
Indian Finance Minster has announce that they will increase the import duty on Gold Bars from Rs.100/10grams to 200/10grams. While in other Gold items other than Jewelery by Rs.250 per 10 grams to Rs.500 per 10 grams.
On the other side on Silver they has decided to put the import duty of Rs.1000 per Kilo Grams which was Rs.500 per Kilo Grams earlier which wasn't change from past many years, the last revision on import duty rates were done in 2004.
finance Minister has decided to extempsion Excise Duty on branded jewelery to make it popular in Indian People.
After the announcement on Increase of Import Duty the Gold Rates has increased in Indian Market by Rs.100/10gms this really bad and tough decision by the minister because we all know Luxury Sector around the world is not doing much so they must have done something by which this sector get some relief but its not done.
Though they have decided to extempsion excise duty on branded jewelery but it will not make much difference to increase in Gold Prices as well as branded jewelery is not so popular in India still Indian People interested in buying from local jeweler instead of branded stores.
So, in all it is a very bad and poor decision from Indian Minister and it is expected that Luxury and Gold Silver Sector has to face more weak sales for few time to get out from bad and low sales.
