New Delhi, May 14 -- The recent increase in customs duty on gold imports to 15 per cent could push up domestic gold prices, alter physical market dynamics and have implications for India's current account deficit (CAD), according to a report by SBI Research.

The report said the import duty increase is likely to have a ripple effect across the bullion market, including a possible diversion of supplies through unofficial channels.

"The decision to increase duty on gold imports has been taken on numerous occasions in the past. However, imposition of duty has its consequences in diverting the physical supply to grey channels," the report said.

According to the report, the widening gap between international and domestic gold prices after a ...