Govt may announce incentives for gold jewellery exporters
The government is considering incentives for gold jewellery exporters hit by restrictions imposed on import of the metal to contain current account deficit (CAD).
New Delhi: The government is considering incentives for gold jewellery exporters hit by restrictions imposed on import of the metal to contain current account deficit (CAD).
"Government is looking at the demands of gold jewellery exporters for hiking duty drawback rate to 8 percent and removal of restrictions on sale of gold in the domestic market," a government official said.
Although the government has increased the duty drawback rate to 6 percent from 4 percent, the exporters are saying that it was not enough and the rate should be increased to at least 8 percent.
Duty drawback is the refund of duties on imported inputs for export items.
"Our only demand is that we should be provided gold on easy terms. We have also asked to take steps to reduce transactions cost for us," Gems and Jewellery Export Promotion Council (GJEPC) Vice Chairman Pankaj Kumar Parekh said.
Jewellery exports are expected to decline by about 20 percent in the current fiscal due to limited availability of gold inventory in the domestic market following the government's steps to curb demand, he said.
India exported USD 39 billion worth various precious gems and jewellery in the 2012-13.
The the government and the Reserve Bank have been taking steps to curb the gold imports, which have averaged 152 tonnes in April and May, resulting in foreign exchange outgo of about USD 15 billion.
Gold and silver imports in April jumped by 138 percent to USD 7.5 billion, as against USD 3.1 billion in the year-ago period. Due to high gold imports, the country?s trade deficit in April widened to USD 17.8 billion year on year.
Higher trade deficit in turn puts pressure on CAD, which has been described as the biggest risk to the Indian economy by the RBI.
The CAD, which is difference between the outflow and inflow of foreign currency, was 4.8 percent of the GDP in 2012-13.