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Commerce Ministry seeks to ease gold import norms for exporters

23 Dec 2013 Evaluate

Amid rising concerns over declining gems and jewellery exports, Commerce Ministry has sought for easing restrictions on import of gold, which was imposed by the Reserve Bank of India (RBI) in order to check the rising Current Account Deficit (CAD) of the country. Tthe RBI had imposed curbs on import of gold in August and also laid down various pre-conditions for inward shipment of the precious metal such as 80/20 rule under which 20% of all gold imports by importers has to be re-exported. The government has also raised the imports duty on gold, platinum and silver to 10%, while on jewellery it has been increased to 15%.

Gems and jewellery sector, which is a major consumer of imported gold, accounts for about 15 per cent of country’s total exports. Commerce Secretary S R Rao, in a letter to the government has highlighted that exports of gems and jewellery has been affected by RBI's strict norms on precious metal imports and the commerce department is repeatedly receiving representations from stakeholders seeking to ease norms for gold imports. Furthermore, Rao pointed out that the prohibition imputed by the Department of revenue based on the RBI circular does not appear to be in the prescribed order of Foreign Trade Policy (FTP), stating that country’s exports should not be impacted owing to imports restriction.   

Indian exports, after witnessing double digit growth over the past four consecutive months grew marginally by 5.86% to $24.61 billion in November from $23.25 billion in the same month of previous year particularly owing to a fall in the shipments of gems and jewellery and rough diamonds. Gems and jewellery exports, during the April-October period stood at $24 billion, accounting for 14 per cent of total outward shipments.

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