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From bridal baubles to bullion bars, India's gold culture defies gov't effort to curb imports

  • 83f0cd9f0b60f306290f6a7067009a72.jpg

    In this Thursday, Feb. 14, 2013 photo, an Indian woman looks into a mirror as she tries out gold jewelry at a shop in Mumbai, India. Nowadays, India is by far the world's biggest buyer of gold, which despite its rising value, is an increasing drain on an economy that is growing too slowly to reduce widespread poverty. Last year Indians imported 864 tons of gold, about one fifth of world sales. The cost of 2.5 trillion rupees ($45 billion) was second only to India's bill for oil imports. The unquenchable appetite for gold coins, bars and jewelry has swelled India's trade deficit and weakened its currency, making crucial imports such as fuel more expensive. (AP Photo/Rajanish Kakade) (The Associated Press)

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    TO GO WITH STORY: INDIA GOLD RUSH BY KAY JOHNSON- In this Thursday, Feb. 14, 2013 photo, an Indian woman looks at a display of gold jewelry at a shop in Mumbai, India. Nowadays, India is by far the world's biggest buyer of gold, which despite its rising value, is an increasing drain on an economy that is growing too slowly to reduce widespread poverty. Last year Indians imported 864 tons of gold, about one fifth of world sales. The cost of 2.5 trillion rupees ($45 billion) was second only to India's bill for oil imports. The unquenchable appetite for gold coins, bars and jewelry has swelled India's trade deficit and weakened its currency, making crucial imports such as fuel more expensive. (AP Photo/Rajanish Kakade) (The Associated Press)

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.