Hallmark gold price in Nepal fell to Rs 1,51,300 per tola on Monday from Rs 1,67,200 per tola on Sunday.
Craze to buy cheap gold in Nepal (Rep/AP file)
Gold has become significantly cheaper in Nepal, with prices falling by Rs 15,900. Tola (11.664 grams). The reduction follows a policy change by the Nepalese government, which has halved customs duty on gold imports in response to India’s change in gold import tax.
Earlier this year, in its July budget, India cut import duty on gold and silver from 15% to 6%, making gold cheaper by about Rs 6,000. The government of Nepal has now taken a similar step, reducing its customs duty on gold from 20% to 10%, which has caused a dramatic drop in gold prices in Nepal.
As a result, the price of hallmark gold in Nepal fell from Rs 1,67,200 per Tola 1,51,300 per Sunday Tola It marks a significant drop of Rs 15,900 on Monday. The Federation of Nepal Gold and Silver Dealers Association confirmed the new price on Monday, November 25.
What is the reason for the price drop?
The Nepal government’s decision to reduce customs duty came after India’s budget announcement, which made gold more affordable in India and increased gold smuggling in Nepal due to price disparity. In response, the government of Nepal took steps to address the imbalance, which had encouraged illegal trade across the open border between the two countries.
The increase in gold smuggling due to the duty gap was a major concern for the authorities. The Federation of Nepal Gold and Silver Dealers Associations had recommended a further 8 percent reduction in customs duty, but the government decided on a 10 percent rate. The move is aimed at curbing illegal trade by making gold more affordable in Nepal.
Gold Prices: Nepal vs India
Despite the drop in gold prices in Nepal, gold is slightly more expensive in Nepal than in India. In India, 10 grams of gold costs around Rs 79,595, while its equivalent in Nepal, when converted to Indian rupees, is around Rs 94,366 per. TolaOr about Rs 80,930 for 10 grams.
Thus, although the devaluation has made gold more affordable in Nepal, it is still marginally more expensive than in India. Nevertheless, the price gap has sparked a wave of gold buying in Nepal, with many consumers buying in bulk in anticipation of further price volatility.