MUMBAI, India – India's government has imposed new taxes on gold to try to curb imports fueling a wide trade deficit. The policy is fighting against strong cultural forces that have made India the world's largest gold buyer.
An unquenchable appetite for gold coins, bars and jewelry has swelled India's trade deficit, weakening its currency.
Last year Indians imported 864 tons of gold, about one-fifth of world sales. Last year's cost of 2.5 trillion rupees ($45 billion) was second only to India's bill for oil imports.
India last month hiked its import tax to 6 percent, but few think that will stop the gold rush. Gold jewelry is essential in Indian weddings, and it's seen as a status symbol and a safe store of wealth.