The government is considering incentives for gold jewellery exporters, who have been suffering due to the restrictions imposed on gold imports to contain current account deficit (CAD), which widened to a record high to 4.8 percent of GDP in the FY13. The Jewellery exports are expected to decline considerably in the current fiscal due to limited availability of gold inventory in the domestic market with government regularly announcing measures to curb demand.
The government may go for the demand of gold jewellery exporters to increase the duty drawback rate to 8 per cent. It has already increased the duty drawback rate to 6 per cent from 4 per cent earlier. Under the duty drawback scheme, the revenue department refunds the duty incidence such as excise, customs, and service tax on the imported inputs used in the manufacture of exported goods. Further, the government is also expected to remove the restrictions on sale of gold in the domestic market.
India exported around $39 billion worth various precious gems and jewellery in the FY13. But the situation started weakening with different government measures and in May, Indian exports declined by 1.1% to $24.51 billion from $24.78 recorded in May’12 mainly due to the restriction on gold exports from Special Economic Zones (SEZ). Gold exports from SEZs in May declined by $0.8 billion, which forced the government to resume gold trading activities from SEZs, which would help reviving the gold exports.
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