New import tax could slash Indian gold buying again

Etnet reports India's finance minister said on Wednesday the country is considering raising the cost of gold imports to rein in its widening current account deficit.

The duty was doubled to 4% in March 2012 and could be raised to 6% in the February budget.

The tax – along with a weak rupee – has already led to a slump in demand in India, long the world's number one consumer of gold.

In 2012, India's gold imports are expected to be in the region of 800 tonnes worth over $40 billion, compared to 1,000 tonnes in 2011.

According to some estimates, Indian households are hoarding close to 20,000 tonnes of gold worth close to $1 trillion, representing 50% of the country's GDP.