Capital Freeze
India’s investment slowdown is no longer a cyclical economic problem. It is becoming a structural crisis of confidence. For years, New Delhi has tried almost every orthodox tool available to revive private sector investment.
The PHD Chamber of Commerce and Industry (PHDCCI) on Wednesday recommended a zero import duty on gold ore concentrate (HSN 26169010) and the introduction of a Production-Linked Incentive (PLI) scheme to boost the domestic gold processing sector.
PHDCCI has also proposed a PLI scheme linked to the amount of gold refined, which it believes will incentivise capacity expansion, technology upgrades, and long-term investment in the sector.
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India’s gold industry continues to be the second-largest globally in terms of consumption and is largely met by imports.
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According to the World Gold Council 2024 report, India witnessed a 5 per cent rise in demand, on a year-to-year basis, in 2024 compared to 2023, supported by a reduction in import duty.
In a statement, PHDCCI President Rajeev Juneja said the outlook for gold also remains bullish on India’s gold demand in 2025 and is expected to remain within the range of 700 to 800 metric tonnes in the next three years.
It is important to foster the growth of the gold ore processing industry, strengthen India’s strategic mineral security, and ensure the sector’s long-term sustainability, Juneja said.
He noted that while copper ore concentrate currently enjoys nil import duty, despite yielding around 12 tonnes of gold annually as a by-product, gold ore concentrate continues to face higher duties. Aligning the duty structure, he argued, is essential to ensure the viability of gold refining in India.
Juneja added that the steep reduction in import duty on finished gold—from 15 per cent to 6 per cent in the Union Budget 2024–25—has made direct imports far more attractive than domestic refining, discouraging investment in local processing infrastructure.
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