India is considering asking gold traders to produce a proof of payment for their jewellery exports, trade body officials said on Monday, a move which may tighten supplies in the world's top bullion buyer.
Mumbai: India is considering asking gold traders to produce a proof of payment for their jewellery exports, trade body officials said on Monday, a move which may tighten supplies in the world's top bullion buyer.
The Reserve Bank of India (RBI) last month made it compulsory for importers to export 20 percent of their goods to curb gold supplies into the country and help reduce its trade deficit.
As a result, fresh supplies dried up as importing agencies were awaiting the final operational guidelines from the customs department.
Two officials of the Gems and Jewellery Export Promotion Council (GJEPC), who have seen the draft guidelines said, if implemented, traders could only import gold for a third time once documents showing a received payment for a first lot of exports were produced.
"Before importing the third lot, they will have to give proof of exports, not by showing custom attested invoice or shipping bill, but inward remittance of payment for the first (lot)... ," said Pankaj Kumar Parekh, vice-chairman of GJEPC.
The whole procedure would take nine months and until that point, new gold shipments cannot come in, even for export, said Parekh, adding that the GJEPC was talking to the authorities to convey its reservations about the guidelines.
In the four months starting April, jewellery exports fell 62 percent to USD 2.11 billion.
Currently, jewellery exporters have up to 90 days to ship out from the date of import, and 180 days to receive payment from overseas buyers.
In effect, an exporter might be able to import only three consignments in a year, said Sabyasachi Ray, executive director at GJEPC, another official who saw the draft notification from the customs department.
As part of its efforts to curb gold imports, the government on August 14 made it compulsory for them to be covered by a licence from the foreign trade office and asked for them to be brought into a customs bonded warehouse.
Separately, a finance ministry source said there were no fresh measures planned to restrict gold imports.