In light of ever-increasing import duties on gold, 10 medium-sized gold dealers are rushing to set up domestic gold refineries in rural India. Business Standard reports on the phenomenon, driven by the government's policy of giving a 1% tax break to companies that set up refineries in underdeveloped regions of the country.
The ten refineries are expected to cost a total of Rs 900 crore ($1.67 billion.) What makes this large expenditure worth it? Raw gold, known as doré, is partially-processed gold that is roughly smelted by mining companies for transport. The import taxes on doré in India is 5%, compared to 6% for refined gold. By building their own refineries, the gold companies can import raw gold at a 1% savings, and get an additional 1% savings due to the government development incentive.
The companies intend to import raw gold from Russia, Australia, Peru, and several African nations.
Complete story at Business Standard.