Gold imports in Nepal have risen significantly since the government reduced customs duty on gold imports a month ago. In late November, the government decreased the duty from 20% to 10%. Earlier, the government had increased the customs duty from 5% to 20% in the budget for the fiscal year (FY) 2024–25.

The impact of this 50% reduction is evident in the latest import data. According to the Department of Customs, 53,414 grams of gold were imported in the month of Mangsir (mid-November to mid-December), compared to 32,409 grams in Kartik (mid-October to mid-November). Notably, no gold imports were recorded in Asoj (mid-September to mid-October).

Gold traders had previously raised concerns that high customs duties, combined with elevated gold prices, made importing gold unfeasible, especially after India reduced its gold import duty from 15% to 6% in Shrawan (mid-July to mid-August). Traders warned that this disparity could make gold more expensive in Nepal, increasing the risk of smuggling from India.

The government's decision to revise customs rates came after pressure from multiple stakeholders. The Federation of Nepal Gold and Silver Dealers Association met Finance Minister Bishnu Poudel and urged the adjustment. Banks had also limited gold imports, citing low market demand. The reduced import volumes affected government revenue, prompting a reevaluation of the duty.

Data from the Department of Customs reveals that gold worth Rs 3.59 billion was imported during the first five months of the current fiscal year. From mid-July to mid-December, the  country imported 325,534 grams of gold and gold jewelry. The government has set a daily import quota of 20 kg, which commercial banks are utilizing. Despite this, gold traders report that market supply remains insufficient.

Confusion persists regarding gold procurement following a Supreme Court ruling in November, which allowed traders to obtain gold without recommendations from the Federation of Gold and Silver Dealers Association. This ruling requires Nepal Rastra Bank (NRB) to revise its work procedures related to gold import, sale, and distribution. The existing procedures, established in 2068 BS, mandate recommendations from the federation for purchasing gold from banks.

An NRB official confirmed that the central bank has formed a task force to propose revisions to these procedures. "The process of revising the work procedures is underway, and improvements will be implemented based on the task force's suggestions," the official stated. Additionally, NRB has instructed the Nepal Bankers Association to facilitate gold sales to traders unaffiliated with the federation, aligning with the court's directive.