India will not roll back import curbs on gold imposed in the wake of a record rise in the import of the commodity until the country's current account deficit (CAD) is under control, finance minister P Chidambaram said today.
The Indian government imposed record high import duty on gold and other restrictions on import of the precious metal after international prices of gold scaled new highs more than doubling its gold import bill.
Chidambaram was speaking to a television channel on the sidelines of the WEF's Davos Summit.
"Until we have a firm grip on the CAD, I don't contemplate any roll back of any measure," Chidambaram told the TV channel.
"We will get the full idea of the CAD only when Budget is presented," he said.
The import curbs imposed by the government and the RBI helped pare gold imports to 19.3 tonnes in November from a high of 162 tonnes in May.
The government had increased customs duty on gold thrice in 2013 to 10 per cent while the RBI linked imports of the metal to exports.
Under the 80:20 rule, new imports are not allowed until 20 per cent of the previous shipments are exported.
The government expects the CAD, which touched a record high of $88.2 billion in 2012-13 fiscal, to be brought it down to $50 billion this fiscal.
The CAD in the first half (April-September) of the current fiscal had narrowed to $26.9 billion (3.1 per cent of GDP), from $37.9 billion (4.5 per cent of GDP) in the first half of the previous fiscal.
In fact, curbs on gold imports has contributed to the improvement in CAD, which dropped to 1.2 per cent in second quarter, from 4.9 per cent in the first quarter.