Gold prices in Nepal plummet after customs duty cut

November 25, 2024, 11:15:03 AM |

KATHMANDU: The price of gold in Nepal has witnessed a significant drop, falling by NPR 15,900 per tola, following the government’s decision to slash customs duty rates. The Nepal Gold and Silver Dealers’ Association announced the new gold price of NPR 151,300 per tola on Monday, compared to NPR 167,200 per tola just a day earlier.

Arjun Rasaile, Chairperson of the Association, explained that the price adjustment reflects the government’s decision to reduce customs duty on gold from 20% to 10%. “The revised prices came into effect from Monday, aligning with the new duty structure,” Rasaile said.

The reduction in customs duty, introduced to combat gold smuggling, had an immediate impact on the market. Harisharan Pudasaini, Director General of the Customs Department, noted, “The government made this decision to ensure gold smuggling from India does not penetrate the Nepali market.”

Earlier, the government had raised the customs duty to 20% from 15% through the budget, making gold significantly more expensive in Nepal than in neighboring India. However, India’s recent budget announcement included a reduction in its customs duty on gold, leading to cheaper gold prices across the border.

This disparity in prices between the two countries raised suspicions of smuggled gold entering Nepal, as gold became less affordable in the domestic market. Furthermore, the formal import channels reported a sharp decline in the volume of gold entering Nepal, reflecting the market’s struggle to compete with smuggled goods.

Impact on the Gold Market

The sudden reduction in prices is expected to revive customer interest and increase transactions in Nepal’s gold market. However, industry stakeholders are closely monitoring the situation to assess the long-term effects of this policy change.

Economic analysts have praised the decision as a step toward reducing illegal trade, but they also caution against any loopholes that could undermine the government’s objectives.

The Nepalese government has urged market participants to comply with formal trading practices and assured vigilance to curb gold smuggling, aiming to stabilize the market and protect the nation’s economy.

Fiscal Nepal |

Monday November 25, 2024, 11:15:03 AM |