Zerodha founder and CEO Nithin Kamath on Wednesday said that had the gold and silver import duty hike happened in the United States, people close to the decision-making process may have found ways to trade the information beforehand through regulated futures markets, derivative contracts or prediction platforms such as Polymarket and Kalshi.
Indian financial markets, despite their flaws, remain far more tightly regulated in certain grey areas compared with several Western markets, he wrote on microblogging platform X, formerly Twitter.
Kamath pointed to the government’s late-night decision to raise import duties on gold and silver to 15% and highlighted how there were no unusual movements in open interest, prices or trading volumes in gold and silver contracts ahead of the announcement. “The interesting thing: neither open interest, prices, nor volume in Gold and Silver showed any unusual moves in the hours leading up to the announcement,” Kamath wrote.
Kamath said the absence of suspicious activity before such a major policy move stood in sharp contrast to what he believes would likely happen in markets such as the United States.
Kamath also referred to previous allegations and reports linked to crude oil trading and market activity during the Iran conflict, where questions were raised around individuals allegedly trading through futures contracts and prediction markets ahead of or around important geopolitical announcements.
According to Kamath, the increasing normalisation of such activity raises larger concerns around misuse of privileged information.
“It’s kind of insane how casually people in power seem to monetize privileged information. At some point, this stops looking like ‘market participation’ and starts looking like blatant insider trading with better branding,” he wrote.
The comment came after the central government hiked customs duty on imports of gold, silver and other precious metals, with the revised rates taking effect from midnight.
Following the revision, the total customs duty on gold and silver has been raised to 15% from 6% earlier. The government has imposed a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports, taking the effective import tax to 15% from 6%.
Platinum and related precious metal components such as hooks, clasps, clamps, pins and screw backs used in manufacturing will also attract a 10% duty.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
