India, the world’s second largest gold consumer, has scrapped the unpopular 80:20 rule. The rule was introduced by the previous government and forced importers to export 20% of all the gold imported into the country.

The aim of the import tax was to help reduce the country’s current account deficit and protect the value of the rupee. The introduction of the tax caused gold imports to fall and smuggling to surge.

The move has surprised traders and industry experts and will be welcome news to jewellers and manufactures that previously faced difficulties sourcing gold.

Now the rule has been scrapped you would expect gold imports to rise significantly.