PRECIOUS METALS | Nomura Securities: India May Implement Further Measures to Curb Precious Metal Imports

Nomura Securities analysts have indicated that following the recent increase in tariffs on gold and silver, the Indian government is likely to take additional steps to reduce precious metal imports. According to Jin10, this tariff hike aligns with Indian Prime Minister Narendra Modi's previous call for citizens to conserve foreign exchange and avoid purchasing gold and jewelry. Given India's current balance of payments deficit exceeding $70 billion, Nomura Securities believes the tariff increase aims to reduce precious metal imports and narrow the current account deficit. Nomura estimates that imports of precious metals, including platinum, have surged significantly, now accounting for 2.7% of India's GDP. Prime Minister Modi's appeal suggests that the government is unwilling to tolerate further deterioration of the 'twin deficit' situation at the policy level. Potential upcoming measures by the Indian government may include policy tools to curb imports of non-essential items like electronics, issuing 'diaspora bonds' to raise foreign exchange deposits, or increasing fuel prices to alleviate fiscal pressure.