Commerce Ministry for easing of gold import norms
The Commerce Ministry on Wednesday pitched for easing of gold import norms to increase the availability of the metal in the domestic market and boost exports.
New Delhi: The Commerce Ministry on Wednesday pitched for easing of gold import norms to increase the availability of the metal in the domestic market and boost exports.
Commerce Secretary Rajeev Kher said the ministry has spoken to the Finance Ministry on the matter and it is "under their consideration".
"There is a need of rationalisation in (gold import) duty and (gold import) procedure.... We have already made it clear that there is a need to look at the current gold import regime," he told reporters.
In order to check rising current account deficit (CAD), the government had raised import duties and the RBI imposed curbs on import of gold and also laid down various pre-conditions for inward shipments of the precious metal.
Kher also said that there is a need to simply the 80:20 rule of the government and make it easier for exporters to source gold for exports.
"If you feel that the initial concerns of CAD are fully addressed, as we hope to in the next several months, then there will be a reason to restore or at least to some extent the (earlier) position (on gold imports)," he said.
"There is a clear perception that there could be something that could have to be done. It will happen in Budget if it has to happen," Kher added.
The government under the 80:20 scheme on August 14, 2013, allowed nominated agencies to import gold on the condition that 20 percent of the inward shipment will be exported. The permission to import the next lot depends on on fulfillment of export obligation.
Gems and jewellery exporters, which account for about 15 percent of the country's total shipments, raised concerns over the restrictions on gold imports and demanded easing of norms in this regard.
Gems and jewellery exports recorded a marginal 1.36 percent to USD 3.43 billion in May. During the 11-month period of the last fiscal, shipments declined by 7.15 percent to USD 35.73 billion.
Last month, the RBI had earlier eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the precious metal to boost exports.
Gold imports declined 72 percent to USD 2.19 billion in May due to restrictions imposed by the government on inbound shipments of the precious metal to narrow the CAD.
India's current account deficit (CAD), which is the excess of foreign exchange outflows over inflows, touched a historic high of 4.8 percent of GDP in 2012-13, mainly due to rising imports of petroleum products and gold.
A high CAD puts pressure on the rupee, which in turn makes imports expensive and fuels inflation.