New Delhi: The government of India on February 1 recommended reducing import duty on gold and silver to 7.5 percent, a move which would make the bullion metal and jewellery cheaper in the domestic market for the buyer.

Finance Minister Mrs. Nirmala Sitharaman in her Budget speech said, “It is proposed to decrease custom duty on gold and other precious metals from 12.5 percent to 7.5 percent.”

The year 2020 was a challenging year for all major economies including India as governments enforced stringent steps to limit the COVID-19 spread, but these measures adversely impacted economic growth.

India is the second-largest buyer of gold after China consuming 446.4 tonnes of yellow metal in 2020 worth Rs 188,280 crore ($25.4 billion), as per World Gold Council.

The gold demand in the country fell by 35 percent to 446.4 tonnes in 2020 against 690.4 tonnes in 2019 while total jewellery demand dropped by 42 percent to 315.9 tonnes compared to 544.6 tonnes in the same period on the back of COVID-induced lockdowns and lifetime high prices.