NEW DELHI/KOLKATA: India, the world's biggest consumer of gold, raised import duties for the third time in 2013 to curtail the current account deficit and stem volatility in the rupee. The government has increased the customs duty to 10% from 8% on the yellow metal, a move that helped the rupee edge up against the dollar but will make the commodity costlier by about Rs 600 per gram. Customs duty on platinum has been raised to 10% from 8%, and on silver to 10% from 6%. The government also raised the excise duty on gold and silver bars. These appeared, at least for the moment, to assuage traders in the foreign exchange market. The rupee erased its morning losses to end at 61.19/20 against the dollar, a gain of eight paise from Monday. The Indian currency has lost nearly 12% since May. "The basic purpose of enhancing the duty was to curb the import of gold," Revenue Secretary Sumit Bose told reporters. The higher taxes on precious metals would fetch the exchequer an additional Rs 4,830 crore. The increase in import duties on precious metals is part of a series of steps announced by Finance Minister P Chidambaram on Monday to restrict the current account deficit to 3.7% of GDP and ensure its "full and safe financing". Chidambaram on Monday said the government's plan is to restrict gold imports to 850 tonnes in the current financial year, compared with 950 tonnes in 2012-13. Gold imports stood at about 335 tonnes in the April-June quarter. "This is as much a red line as the fiscal deficit. We will do all to ensure that it is not breached. The current account deficit will be contained and fully and safely financed," he had said, unveiling his plan to contain CAD. On Tuesday, Bose said the government was still working on the plan to hike import duties on non-essential goods.

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