The Indian government may re-introduce the 80:20 gold import rule to. Under the 80-20 rule institutions importing gold had to export 20% of the gold before any further imports could be made. The rule was imposed to cut the country’s current account deficit and defend the Indian Rupee.
Following the relaxation of the rule India’s trade deficit has worsened. In September the trade deficit rose to $14 billion as gold imports surged 450% as importers took advantage of the relaxed rules and lower gold prices.
The import taxes have been extremely unpopular as gold is central to Indian culture, with Indians buying gold as a store of value and for gifts at weddings and religious festivals. Prior to being elected the Bharatiya Janata Party had promised to remove the tax permanently if elected.