India is has launched its latest series of sovereign gold bonds as part of its efforts to curb imports of the precious metal and lower its current account deficit.
The government said the scheme would retain the incentives offered in the earlier trance and the bonds will be sold every month from October 2018 through February 2019 through banks.
The bond offer 2.5% interest rate and capital gains tax exemption on redemption. The tenor of the bond will be for a period of eight years with exit option in the fifth, sixth and seventh year, it said in a statement.
The bonds will be restricted for sale to resident entities including individuals, families, trusts, universities and charitable institutions.
The bond price will be fixed in Indian rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period, the statement said.
The issue price of the gold bonds will be `50 per gram less for those who subscribe online and pay through digital mode.
The current account deficit had widened to a four-quarter-high at 2.4% of gross domestic product (GDP) in the April-June period on the back of rising crude oil prices, from 1.9% of GDP in the January-March quarter of 2017-18, the Mint newspaper said.