Gold imports set to resume as government clarifies rules

Gold imports to India are expected to restart after the government on Friday clarified on the rules on import of the precious metals by the various agencies recently notified by the Reserve Bank of India (RBI).

Gold imports had come to a near standstill after the RBI notification issued on 22 July made it mandatory for importing agencies to ensure that a minimum 20 per cent of the gold imported is re-exported.

The customs authorities are reported to have wrongly interpreted the RBI notification and set the 20 per cent minimum export requirement as the cap on re-exports.

At a joint meeting of the commerce department and the RBI with importers, the customs and industry representatives, on Friday, the government has clarified that the RBI rules on imports make 80 per cent of imported gold available for domestic consumption even after re-exporting 20 per cent.

The RBI and the customs will give detailed instructions to staff at customs stations explaining the rules. Officials at the RBI, the commerce department, the CBEC and MMTC will also coordinate oversight to ensure that imports are not hindered in any way.

The meeting on Friday also decided to appoint focal officials in the RBI, the commerce department, the CBEC, and MMTC to ensure that imports take place smoothly.

While the main reason cited by importers was confusion at customs stations on interpreting the 80:20 norm, what really stymied imports was the means of ensuring that imports strictly follow the 20 per cent re-export norm. Importers, mainly government agencies, had no way of ensuring re-exports by user industries other than through reporting.

With the peak wedding and festival season demand round the corner and demand expected to pick up in the next 10-15 days, the import jam had created apprehensions in the minds of jewellers.