India’s gold tax sees trade with UAE slump by 21%

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Trade between the UAE and India plummeted 21 percent during the 2013-14 financial year after India increased its gold import tax by five times, according to a report by HSBC.

Bilateral trade between the countries had reached a record $75.4 billion during 2012-13 but dropped to $59.6 billion a year later, mainly due a $9bn decline in gold exported from the UAE to India.

The Indian government hiked the duty on gold bullion imports three times last year from 2 percent to a record 10 percent, in a bid to raise money to help curb a bulging current account deficit.

The import duty on gold jewellery also was increased to 15 percent.

 

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