According to the Indian finance ministry is considering reducing the gold import duty to between 6-8% by the end of February.

The tax was introduced to stop India’s current account deficit widening and to ease downward pressure on the Indian rupee. With the current account now under control many industry insiders believe the government is preparing to reduce the tax.

As a result of the tax gold smuggling into India has soared and during the last wedding season premiums rocketed to over $130 per ounce. The tax has had little effect as Indian consumption increased by more than 100 tonnes in 2013.