India has raised import duty ongoldand silver from 6 per cent to 15 per cent in order to ease pressure on the country’s foreign exchange. According to the finance ministry, the move is aimed to curb precious metals import, reduce the trade deficit, support the rupee amid rising economic pressure due to global events. The hiked import duty, according to the government notification, will be effective from today, May 13 onwards.

According to the government notification, the Centre has hiked the basic customs duty on various categories of gold and silver imports to from 5 per cent to 10 per cent. Also, the Agriculture Infrastructure and Development Cess (AIDC) of 5 per cent also remains effective, taking the total hike to 15 per cent.

The move to hike the import duty has come amid Prime MinisterNarendra Modi's austerity push as he has urged the citizens not to buy gold for at least an year, in a bid to preserve country's foreign reserves.

On Tuesday, Gold climbed Rs 1,500 to Rs 1.56 lakh per 10 grams in the national capital, and silver soared more than 4 per cent to Rs 2.77 lakh per kilogram, mainly due to a sharp fall in the rupee against the US dollar and firm domestic sentiment amid persistent geopolitical tensions.

According to the All India Sarafa Association, gold of 99.9 per cent purity increased by Rs 1,500, or nearly 1 per cent, to Rs 1,56,800 per 10 grams (inclusive of all taxes) from Monday's closing level of Rs 1,55,300 per 10 grams.

"Gold traded with gains in the domestic market, supported by a weaker Indian rupee and steady sentiment," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.

The rupee depreciated 35 paise to close at an all-time low of 95.63 (provisional) against the US dollar on Tuesday, continuing to provide strong support to domestic gold prices, he added.

Silver prices also advanced by Rs 12,000, or 4.53 per cent, to Rs 2,77,000 per kg (inclusive of all taxes). The white metal had settled at Rs 2,65,000 per kg in the preceding session, as per the association.

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